This development represents a part of the growing trend where lending and borrowing DeFi platforms are expanding their offerings beyond dollar-pegged stablecoins.
Decentralized lending and borrowing platform Aave (AAVE) has launched Circle’s EURC (EURC) stablecoin on Base layer 2 blockchain.
According to the announcement on Monday, EURC is now live on Aave’s Base market. With EURC on Aave’s Base market, users can now borrow EURC or use it as collateral to take out other loans on the platform.
This addition expands the options for Aave users in terms of borrowing and leveraging their assets. It also builds on the growing trend where lending and borrowing DeFi platforms are expanding their offerings beyond dollar-pegged stablecoins. Last year, the DeFi protocols Fluid and Moonwell also activated a market for EURC on Base.
It’s also part of the broader effort to integrate more MiCA-compliant stablecoins and delist non-compliant ones, after the MiCA regulation went into effect.
To ensure adherence to MiCA regulations, Binance announced that it would delist nine stablecoins, including USDT and DAI for users in the European Economic Area. Similarly, Coinbase delisted non-compliant stablecoins, including Tether, and encouraged customers to transition to compliant ones, such as USDC and EURC.
MiCA compliance ensures that stablecoins and other crypto assets adhere to strict European Union regulations. Issuers must be licensed and registered within the EU, regularly disclose their reserves, and undergo audits to prevent fraud and mismanagement. Consumers have the legal right to redeem stablecoins 1:1 for fiat currency, with issuers obligated to maintain fully backed reserves in secure, low-risk assets. The European Banking Authority and national regulators oversee compliance, with the power to ban non-compliant stablecoins and intervene in cases of financial instability.
Circle, which issues EURC and USDC, became the first stablecoin issuer to be licensed by MiCA, effective July 1.
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