The European Securities and Markets Authority (ESMA) stated that authorized platforms must prevent new access to avoid customers coming into contact with stablecoins that do not comply with ESMA regulations, while national regulatory authorities are responsible for monitoring the positions of existing customers.
New guidance requirements issued by ESMA state that authorized crypto platforms must cease providing services and are not allowed to allow EU customers to trade or increase their holdings of stablecoins that do not comply with the EU's Crypto Assets Markets Regulation (MiCA).
This guide does not specifically mention any particular tokens. However, USDT, a US dollar-pegged stablecoin of Tether, is the largest stablecoin by market capitalization and also serves as a notable example that has not been authorized by MiCA.
National regulatory authorities should ensure that the positions held by remaining customers are settled within three months, while allowing limited services for users to sell, convert, withdraw, transfer, or hold onto their existing tokens.
According to the new guidelines released on Thursday by ESMA, EU crypto platforms have a maximum of three months to stop customers from accessing USDT and other stablecoins that do not comply with the EU's Crypto Assets Markets Regulation (MiCA).
This guidance, sent to the national regulatory authorities in the form of recommendations, does not name any specific tokens. Tether issued USDT is the largest stablecoin in terms of market value and also represents the most prominent large-scale example that has not been authorized by MiCA. PayPal USD ( PYUSD ), which is third in market value, has also not been authorized.
MiCA The regulations regarding stablecoins will come into effect from June 2024, requiring issuers of US dollar and euro-pegged tokens provided to EU users to meet authorization, reserve, redemption, and disclosure requirements. ESMA These stablecoins are referred to as asset-backed tokens and electronic currency tokens.
ESMA indicates that: ESMA believes that CASP should not provide encryption asset services for ART or EMT that do not meet the applicable requirements of MiCA (that is, ART or EMT that do not comply with MiCA). Here, CASP is the abbreviation for encryption asset service provider.
Some platforms have previously restricted EU users from using USDT. The complete rules for MiCA regarding crypto platforms came into effect on July 1st, forcing unauthorized companies to stop providing services to EU customers.
This guidance states that authorized cryptocurrency companies must cease providing services related to stablecoins that allow EU customers to purchase, trade, exchange, or otherwise increase their holdings of such coins.
These rules cover exchange services, transaction execution, transfers, custody, management, consulting, and portfolio management.
ESMA indicates that national regulatory authorities should require any remaining customer positions to be resolved 'as soon as possible, and no later than three months' after the issuance of the opinion. This means that the deadline is January 8, 2027.
During this period, the platform can provide limited services to manage existing positions, including selling, converting, withdrawing, transferring, or securely storing tokens, but it will not be able to perform purchases, promotions, transactions, or maintain market availability.
If EU users hold USDT on the exchange, they will be required to follow the instructions of that platform. Some users may be able to sell or withdraw USDT during the exit period; others may face an earlier deadline.
ESMA indicates that continuing to provide non-compliant stablecoins through authorized platforms will weaken the reserve, redemption, governance, and disclosure rules imposed by MiCA on authorized issuers.
This opinion is sent to the national regulatory authorities, who will decide how each platform should handle the remaining balances of their customers within a maximum period of three months.
