The European Union is calling for timely implementation of stablecoin regulations across member states, with a two-month deadline to ensure compliance.
EU Regulator Calls for Immediate Compliance with Stablecoin Rules
The European Securities and Markets Authority (ESMA) has issued a warning to national authorities in the EU, urging them to ensure that exchanges are no longer making non-compliant stablecoins available for trading. This move is expected to affect stablecoins that do not meet the requirements of the EU’s Markets in Crypto-Assets (MiCA) regulation.
Impact on Non-MiCA Compliant Stablecoins
Stablecoins like Tether’s USDT, which are not compliant with EU laws, will be affected by this decision. ESMA has requested that crypto asset service providers (CASPs) operating trading platforms for crypto-assets stop making non-compliant stablecoins available for trading. This includes asset-referenced tokens (ARTs) and electronic money tokens (EMTs) issued by unauthorised entities in the EU.
Compliance Deadline
National authorities in the EU have been given a two-month deadline to ensure compliance with ESMA’s stablecoin rules. The regulator has specified that CASPs should be compliant no later than the end of Q1 2025. This means that exchanges like Gemini and Coinbase, who are registered in the EU, will need to delist unauthorised stablecoins from their platforms.
Large Issuers Take Steps towards Compliance
Some large issuers have already taken steps to comply with MiCA regulations. Tether announced in November that it would discontinue its euro stablecoin (EURT) due to its inability to obtain an e-money license in the EU. Circle, on the other hand, obtained an e-money license in July 2024.
Exchanges’ Response
Coinbase has previously announced that it would delist any tokens that do not meet MiCA requirements by last December. The exchange has restricted services for retail, exchange, and prime vault customers related to non-compliant stablecoins since December 13, 2024. Coinbase will reassess re-enabling services for compliant stablecoins on a later date.
The EU’s strict regulations on stablecoins are expected to have far-reaching implications for the crypto industry. With the deadline for compliance looming, issuers and exchanges must take immediate action to avoid non-compliance penalties.
