EU securities regulator has clarified the status of MiCA-compliant stablecoins

What’s new? The European Securities and Markets Authority (ESMA) has published a clarification on the status of stablecoins that are non-compliant with the EU-wide Markets in Crypto-Assets (MiCA) regulation. ESMA, as the main regulator overseeing compliance with MiCA, noted that the provision of non-compliant stablecoin custody and transfer services does not violate the law.

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What else is known? The regulator clarified that under MiCA, storage and transfer do not fall within the definitions of public offering or admission to trading, and are therefore not explicitly prohibited under Titles III and IV of the new European cryptocurrency legislation.

MiCA rules require stablecoin issuers to hold a portion of their reserves in cash in banks and obtain an Electronic Money Institution (EMI) license from at least one EU member state.

While ESMA acknowledged that deposits and withdrawals of MiCA non-compliant stablecoins are not prohibited, officials emphasized that European crypto asset service providers (CASPs) should seek to restrict services that facilitate the purchase of such assets. In doing so, they referred to their guidance issued on January 17, 2025.

The agency explained that CASPs are allowed to maintain withdrawals until March 31 to allow investors to exit their positions.

ESMA’s confirmation that MiCA does not explicitly restrict the holding and transfer of MiCA-compliant stablecoins, coupled with the recommendation for CASPs to cease withdrawals after March 31, has only added to the uncertainty around compliance with the legislation.

Earlier this month, Binance, the largest centralized crypto exchange (CEX), announced the delisting of nine MiCA non-compliant stablecoins for users in the European Economic Area (EEA) on March 31.

The changes will affect the largest stablecoin on the crypto market, USDT from Tether, as well as FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC, and PAXG.

Along with this, Binance stated that it would support deposits and withdrawals of the said assets after the delisting.

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Crypto.com exchange delisted USDT in Europe in late January, while the Coinbase exchange closed USDT, PYUSD, and DAI trading for European users last December. Similarly, the Uphold exchange did the same for USDT, DAI, FRAX, GUSD, USDP, and TUSD back in June 2024.