ESMA Imposes Restrictions on Non-MiCA-Compliant Stablecoins in the EU

• ESMA strengthens compliance requirement for stablecoins
• Platforms must delist unlicensed tokens in the EU
• Transition period ends in the first quarter of 2025

The European Securities and Markets Authority (ESMA) has strengthened its need that crypto asset service providers (CASPs) restrict the offering of stablecoins that do not comply with the Markets in Crypto Assets Regulation (MiCA). This measure represents a significant step in the European Union’s attempt to establish a stricter regulatory environment for the cryptocurrency sector, ensuring greater security and transparency in the market.

MiCA, officially implemented in June 2024, defines detailed rules for the issuance, marketing and circulation of asset-referenced tokens (ARTs) and electronic currency tokens (EMTs), categories that encompass stablecoins. The regulation requires issuers of these cryptocurrencies to obtain a specific license to operate within the European bloc, meeting a series of criteria, including minimum capital, regular audits, compliance with anti-money laundering and consumer protection rules.

With the ESMA requirement, companies offering crypto asset services must cease trading unauthorized stablecoins, ensuring that all operations are aligned with MiCA guidelines. Supervision will be the responsibility of the National Competent Authorities (NCAs), which will oversee the adequacy of the platforms and apply sanctions when necessary. The restrictive measures are expected to come into effect as of January 2025, affecting the availability of stablecoins that do not meet the established requirements.

To minimize abrupt market impacts, ESMA will allow CASPs to offer a transition period until the end of Q2025 XNUMX. During this period, non-compliant stablecoins will be allowed to be held exclusively on a “sale-only” basis, allowing investors to liquidate or convert their holdings before they are completely removed from the platforms. This approach seeks to balance the need for investor protection with the stability of the crypto market, avoiding abrupt trading halts.

The decision directly affects some of the most widely used stablecoins in the global market, including Tether’s USDT, which experts say does not have a license to operate under MiCA. This restriction could lead platforms operating in Europe to remove this asset from their services, which will impact both institutional investors and individual users who use stablecoins as a means of transaction or store of value.

The new regulation represents a continued effort by the European Union to structure a safer and more regulated cryptocurrency market, reducing risks associated with volatility, lack of transparency and potential illegal practices. The implementation of MiCA reinforces the bloc’s intention to lead the global regulation of digital assets, establishing a model that could influence future regulatory initiatives in other jurisdictions.