“On account of their stronger links to the traditional financial system — through the use of reserves — regulators have been particularly concerned by the possible impact that the failure of a larger stablecoin may have.”
However, Cropper-Mawer noted with the increasing popularity of private stablecoins, it’s anticipated that the use of certain larger stablecoins will “quickly become stifled” but added she anticipates legislators will"revisit this issue." However, she quickly noted that MiCA lawmakers are unlikely to have missed the potential negative impacts these regulations could have, especially when looking at the prevalence of private stablecoins in other markets.
Despite receiving an expected level of criticism for such a wide-ranging and expansive piece of legislation, Agnihotri notes that the majority of feedback towards MiCA has been largely positive.
Tether’s chief technology officer Paolo Ardoino told Cointelegraph that the framework would have to undergo more dialogue and a potential modification before it was enforced on private stablecoin providers.