TL;DR
- ESMA urged cryptocurrency firms in the European Union to halt services involving stablecoins that do not comply with the MiCA regulation.
- National regulators have until January 8, 2027, to require platforms to address their existing exposures to these assets.
- The restrictions cover trading, custody, transfers, investment advice, and portfolio management, although temporary services will be permitted to help users withdraw funds.
The European Securities and Markets Authority (ESMA) urged cryptocurrency firms in the European Union to halt services involving stablecoins that do not comply with the Markets in Crypto-Assets Regulation (MiCA).
The authority set a maximum deadline of three months, until January 8, 2027, for national regulators to require companies to address their existing exposures to these assets.
According to the document published by ESMA, crypto-asset service providers (CASPs) authorized under MiCA must stop offering European clients services involving stablecoins that lack the required authorization.
ESMA Expands Restrictions on Stablecoin Services
The new guidelines cover a range of regulated activities, including trading platforms, exchange services, order execution, custody, and crypto-asset transfers.
They also apply to investment advice and portfolio management when these activities involve stablecoins that do not comply with MiCA.
ESMA stated that companies must implement technical, contractual, and organizational controls to prevent European clients from acquiring these assets or increasing their existing positions.
National authorities must oversee the implementation of these measures and require companies to address their outstanding exposures as soon as possible, without exceeding the established deadline.
Limited Transactions Will Be Allowed to Withdraw Assets
The regulator provides for temporary exceptions to help users exit their existing positions in unauthorized stablecoins.
Permitted activities include liquidation, conversion, withdrawal, and transfer of funds, as well as certain custody services necessary during the process.
However, ESMA clarified that these activities must remain under strict supervision and be limited to the time necessary to complete the exit from the affected assets.
The new instructions extend the restrictions to other activities carried out by authorized providers and establish a specific deadline for addressing existing exposures.
