Lugh, a European stablecoin provider, announced that it has stopped the issuance of its Euro-pegged stablecoin EURL due to the coming into force of the European Union's Crypto Asset Markets Directive (MiCA).
According to the statement made on its website, the company guarantees the repurchase of existing EURLs until August 30, 2024.
This development comes after Binance, the world's largest cryptocurrency exchange by trading volume, announced that it would soon limit the availability of “unregulated” stablecoins in the EU. While Binance has not specifically mentioned major stablecoins such as Tether's USDT and Circle's USDC, there are growing concerns that European citizens may face restrictions on accessing these popular tokens due to MiCA.
Lugh's Euro-pegged EURL token has experienced a significant decline in circulation in recent months. Data from DefiLlama shows that EURL's circulation has dropped from around $2.8 million in March to around $32,000 as of today, suggesting that most holders may have already returned their tokens for cash.
Lugh has offered a refund option for token holders on its website. The company argued that it assured its users that “all EURLs are and will continue to be guaranteed 1:1 by our reserve account opened at Société Générale and audited monthly by Deloitte.”
*This is not investment advice.