PSAN: the challenges of Circle and Coinbase's arrival in France

They are arriving in force. Coinbase and Circle have just obtained their registration as digital asset service providers (DASPs) with the Autorité des marchés financiers (AMF), marking their official arrival in France.

Here's why seeing these two crypto giants land is important.

👉 Binance's woes could benefit Coinbase

Coinbase and Circle are historically linked. The market's second-largest exchange platform contributed to the birth of the second-largest stablecoin issuer.

Both companies have always placed regulation at the heart of their expansion strategy and, with the institutionalisation of the sector, that strategy is paying off, 10 years after they launched!

For Coinbase, already registered in Germany and Ireland, this arrival in France coincides with the uncertainties surrounding the future of its main competitor Binance following the admission of guilt of its historic CEO Changpeng Zhao in November and the US fine of more than $4 billion. Without even mentioning the problems of the executive's reputability that this poses.

Binance's obtaining PSAN authorisation, which is compulsory to operate in Europe under MiCA from 1 July 2026, seems more hypothetical than ever, while the path seems fully paved for Coinbase, which has been accelerating its European timetable for several months. (Read our interview on the subject).

👉 Circle and its ambitions as a payment giant

Coinbase clearly has ambitions to make Circle its payment arm. After the forced discontinuation of the BUSD, Binance's stablecoin, and the delisting of the USDT, Tether's stablecoin from its platform, Coinbase has left the field clear for the USDC.

Even more so as the company led by Brian Armstrong recently natively integrated the USDC into Base, its layer 2 (read our analysis). To put it plainly, Coinbase clearly aims to make Circle its armed wing for payments. Today, the circulating supply of USDC, Circle's dollar stablecoin, has reached $24 billion and it recently launched its euro stablecoin, EUROC, so that it can expand into Europe.

But to perfect its ambitions, PSAN is more of a marketing affair for Circle, which doesn't really need it for its ambitions in Europe. The issuer of the USDC stablecoin actually needs more electronic money institution (EME) approval, which will be required to distribute its Euro stablecoin, EURC, under the conditions set by MiCA.

In fact, from 30 June 2024, stablecoins will be regulated as e-money tokens (EMT), i.e. akin to electronic money. The legislation therefore provides an exemption for EMEs that do not need the PSAN to operate.

Even more so that having the EME stamp of the ACPR (Autorité de contrôle prudentiel et de résolution) is a guarantee of seriousness, as the supervisor is renowned for its strictness in Europe.

Thus, France sees the arrival of the world's most regulated platform, whose main stablecoin is beginning to be regulated just about everywhere in the world for use as a means of payment via blockchain... a system that promises far superior performance to the traditional system in terms of speed and interoperability 👀.