MiCA (Markets in Crypto-Assets) is the EU's crypto asset regulatory framework that came into full force in 2024. Its stablecoin provisions (covering two categories: EMT and ART) represent the first comprehensive legal framework for stablecoin issuers in a major jurisdiction. MiCA requires stablecoin issuers to hold licenses, maintain 1:1 fiat reserves, undergo regular audits, and imposes stricter requirements on 'significant' stablecoins exceeding certain circulation thresholds. USDT's delisting from multiple European exchanges — after Tether declined to comply — is the most direct example of MiCA's impact on the global stablecoin landscape.

A peg mechanism is the technical and incentive design a stablecoin uses to maintain its target price (usually $1). Different stablecoin types employ fundamentally different peg mechanisms: fiat-backed relies on 'physical reserves + arbitrage redemption'; crypto-backed relies on 'over-collateralization + automated liquidation'; algorithmic relies on 'automated token supply adjustment + market incentive arbitrage.' The robustness of the peg mechanism determines the stablecoin's stress resistance under extreme market conditions — historically, mechanisms backed by real assets have proven far more durable than pure algorithmic mechanisms that depend solely on market confidence. Understanding peg mechanisms is the core capability for evaluating any stablecoin's long-term reliability.