EU regulator urges firms to restrict non-MiCA-compliant stablecoins
European regulator ESMA is urging crypto asset service providers to take action on non-MiCA-compliant stablecoins by Jan. 31.
According to ESMA, firms should restrict stablecoins that fail to comply with the EU’s new Markets in Crypto-Assets Regulation (MiCA).
ESMA, the EU’s financial markets regulator and a key supervisor of MiCA compliance, stated asset-referenced tokens (ARTs), or stablecoins, on Jan. 17.
A MiCA-compliant stablecoin is not accepted by the authority, so crypto asset service providers must take immediate action to comply. The ESMA did not specify which issuers or stablecoins should be restricted while pushing for the measures.
EU state regulators must ensure compliance by the end of Q1 2025
According to the ESMA, EU state authorities and national competent authorities (NCAs) play an important role in steering CASPs in line with recent guidance from the European Commission.
In this guidance, MiCA clarifies that stablecoin issuers cannot offer stablecoins for which they are not authorized issuers complying with MiCA.
“The guidance notes that non-issuers may offer an ART or a EMT [electronic money token] to the public or seek admission to trading, provided they meet certain conditions.
There are several conditions, including that the issuer is authorized in the EU and that the person obtains written consent from the issuer.
ESMA recommends that NCAs ensure CASP compliance regarding non-compliant stablecoins as soon as possible and by the end of the first quarter of 2025.
Q1 2025 deadline refers to “sell-only” basis
ESMA gave CASPs until the end of Q1 2025 to ensure compliance, but encouraged more urgent actions.
“The restrictions on the existing services are expected to be completed by the end of January 2025,” the agency noted, adding.
“To allow EU investors to liquidate or convert their position in non-MiCA compliant ARTs and EMTs, concerned CASPs may, however, maintain crypto-asset services for these products on a” sell only “basis for a longer period (until the end of Q1 2025).”
USDT issuer Tether doesn’t have a MiCA license
According to a member of the MiCA Crypto Alliance, Tether’s USDt (USDT$0.9985), the largest stablecoin by market capitalisation, may face EU restrictions based on recent ESMA communication.
According to Juan Ignacio Ibañez, a member of the MiCA Crypto Alliance’s Technical Committee, USDT is not a compliant asset as defined by ESMA.
“Tether does not hold a licence. Ibañez concluded that Tether is not an authorised issuer under MiCA, without any argument.
In a LinkedIn article dated January 18, he also proposed that CASPs delist USDT by January 31, except “sell-only” activities.
“No trace of USDT should remain, not even in’sell-only’ mode,” he said, by March 31.
“We are aware of the evolving regulatory landscape under MiCA and its potential implications for the stablecoin market,” Tether’s representative told Cointelegraph.
“Many exchanges are actively engaging with local NCAs to address concerns and mitigate any potential disruption to consumers,” stated a spokesperson. She continued: “At this stage, we do not anticipate immediate changes for Tether users as these discussions progress.”
Some industry officials, including Gemini’s CEO of Europe, have lately emphasized the ongoing misunderstanding around stablecoin restrictions under MiCA. Cointelegraph contacted the ESMA for comment on prospective delistings but did not receive a response by publishing.
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