HTX Ventures Sees 69% Surge in EUR-Stablecoin Trading Amid MiCAR

HTX Ventures, the investment arm of HTX, a prominent crypto exchange, has been navigating the complexities of the regulatory landscape with the implementation of the Markets in Crypto-Assets Regulation (MiCAR) in Europe. This regulation, which provides a unified framework across 27 European Union member states, has brought both opportunities and challenges for the industry.

HTX Ventures has been recognized for its significant EUR-stablecoin trading activity, achieving a monthly average of €48 million, with a notable volume of €33 million in November 2024. This surge in trading coincides with the regulatory shifts brought about by MiCAR, which has become a key driver of institutional adoption and market confidence.

Alec Goh, Head of HTX Ventures, highlighted the importance of MiCAR in providing regulatory clarity and fostering an environment conducive to institutional adoption. He emphasized that a unified framework like MiCAR will accelerate innovation while ensuring robust compliance. HTX Ventures sees this as an opportunity to drive the development of on-chain compliance tools, support the emergence of compliant DeFi solutions, and bridge the gap between traditional finance and digital assets.

One of the key opportunities presented by MiCAR is the reduction of compliance costs and the boost in market confidence. The unified regulatory framework enables exchanges to significantly reduce compliance costs across borders, providing a clear and stable regulatory environment. This, in turn, increases confidence and participation among institutional investors, positioning Europe to become the world’s largest compliant digital asset market.

Technological innovations are also driving the development of on-chain compliance tools. Exchanges can explore innovations such as using Oracle networks to modularize AML rules and reserve monitoring, executing them on-chain for real-time data transparency. Additionally, adopting zk-SNARKs to build an on-chain central platform for regulatory data enables transaction data desensitization, balancing regulatory transparency with user privacy. Leveraging account abstraction technology (ERC-4337) to integrate KYC processes into non-custodial wallets lowers barriers for traditional financial institutions to access DeFi.

New opportunities for the convergence of traditional and crypto assets are also emerging. With platforms launching securitized tokens, exchanges can introduce real-world asset (RWA) trading. This includes income-based stablecoins backed by US stocks or Treasuries, enabling users to leverage assets like USDT for multi-asset allocation and global liquidity matching.

However, MiCAR also presents significant challenges. The high costs and technical complexity of compliance require exchanges to invest significantly in R&D to integrate compliance tools, data desensitization techniques, and on-chain regulatory platforms without compromising market fluidity. The dynamic policy environment adds another layer of uncertainty, requiring continuous investment and collaboration with regulatory-friendly regions for cross-border stress tests and regulatory scenario simulations.

Security risks and stringent custody requirements are also a concern. Following high-profile incidents, MiCAR has introduced rigorous digital asset custody requirements, mandating bank-level security measures to prevent hacking and asset loss. As DeFi integrates with traditional financial regulations, exchanges must address both technical vulnerabilities and evolving security risks.

HTX Ventures firmly believes that under a clearer regulatory framework such as MiCAR, exchanges can achieve a win-win situation through technological innovations and global asset allocation, balancing compliance with market innovation. Moving forward, the firm will continue to leverage its insights and expertise to actively explore on-chain compliance tools, expand RWA trading, and build a dynamic testing environment, navigating regulatory complexities and ensuring that crypto innovation remains aligned with long-term institutional adoption and market sustainability.

HTX Ventures, the global investment division of HTX, integrates investment, incubation, and research to identify the best and brightest teams worldwide. With more than a decade-long history as an industry pioneer, HTX Ventures excels at identifying cutting-edge technologies and emerging business models within the sector. To foster growth within the blockchain ecosystem, they provide comprehensive support to projects, including financing, resources, and strategic advice.

HTX Ventures currently backs over 300 projects spanning multiple blockchain sectors, with select high-quality initiatives already trading on the HTX exchange. Furthermore, as one of the most active FOF (Fund of Funds) funds, HTX Ventures invests in 30 top global funds and collaborates with leading blockchain funds to jointly build a blockchain ecosystem.

HTX, founded in 2013, has evolved from a virtual asset exchange into a comprehensive ecosystem of blockchain businesses that span digital asset trading, financial derivatives, wallets, research, investments, incubation, and other businesses. As a world-leading gateway to Web3, HTX provides users with safe and reliable services, adhering to the growth strategy of "Global Expansion, Thriving Ecosystem, Wealth Effect, Security & Compliance."