Decentralized finance platform Aave has introduced Circle’s EURC stablecoin on the Base layer 2 blockchain, allowing users to borrow EURC or use it as collateral for loans. This marks a significant expansion for Aave’s lending and borrowing ecosystem, which previously focused on USD-pegged stablecoins such as USDC, DAI, and USDT.
EURC on Aave: Expanding Beyond USD-Pegged Stablecoins
The integration of EURC on Aave’s Base market aligns with the growing trend of DeFi platforms expanding their stablecoin offerings beyond the U.S. dollar. This follows similar moves by DeFi protocols Fluid and Moonwell, which activated EURC markets on Base last year.
This development also reflects the broader industry shift toward MiCA-compliant stablecoins in response to the EU’s Markets in Crypto-Assets (MiCA) regulations. Many crypto platforms are now prioritizing MiCA-compliant assets while phasing out non-compliant stablecoins. For instance, Binance recently announced the delisting of nine stablecoins, including USDT and DAI, for European Economic Area users, while Coinbase removed non-compliant stablecoins such as Tether and encouraged customers to switch to USDC and EURC.
What MiCA Compliance Means for Stablecoins
MiCA compliance ensures that stablecoins adhere to strict European Union regulations, requiring issuers to be:
- Licensed and registered within the EU
- Transparent about their reserves
- Subject to regular audits to prevent fraud and mismanagement
- Obligated to maintain fully backed reserves in secure, low-risk assets
Consumers are also granted the legal right to redeem stablecoins 1:1 for fiat currency, with oversight from the European Banking Authority and national regulators. These regulatory bodies have the power to ban non-compliant stablecoins and intervene in cases of financial instability.
Circle Becomes First MiCA-Licensed Stablecoin Issuer
Circle, the issuer of EURC and USDC, became the first stablecoin issuer to receive a MiCA license, with full compliance effective July 1. The company has now begun natively issuing both USDC and EURC to European customers, reinforcing its commitment to regulatory adherence.
As regulatory landscapes evolve, Aave’s adoption of EURC on Base positions it at the forefront of DeFi’s transition toward regulated and compliant stablecoins, paving the way for a more secure and transparent financial ecosystem.
