Does Regulation Bite at Gateways? Evidence from MiCA and Stablecoins
Nicola Borri, Kirill Shakhnov
Abstract
Gateways are trading venues where regulation can change the assets investors can trade. We study this margin using MiCA-EU's Markets in Crypto-Assets Regulation-which led several exchanges to delist USDT pairs for European Economic Area users, while USDC obtained MiCA authorization. First, aggregate market shares and trading volumes barely move. Second, comparing Regulated-facing exchanges with globally oriented exchanges where MiCA is less likely to bind, we show that the cross-section shifts toward USDC-USDC share rises by 0.82 and relative trading volume by 0.54 pre-event standard deviations. Both reflect USDT trading contracting where it is delisted.
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