ESMA allows non-MiCA stablecoin custody, transfers

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The European Union’s top financial markets regulator, the European Securities and Markets Authority (ESMA), clarified that the custody and transfers of stablecoins are not restricted by the EU’s Markets in Crypto-Assets (MiCA) regulation.

This clarification comes after Binance—the world’s largest digital asset exchange by daily trading volume—announced on March 3 the removal of nine stablecoins that do not comply with MiCA, including Tether (USDT), the world’s top stablecoin by market capitalization, or users in the European Economic Area (EEA).

Binance said it would continue to support deposits and withdrawals of these tokens after March 31, which ESMA has now confirmed is within MiCA rules.

According to MiCA, only stablecoins issued by entities that receive authorization from a National Competent Authority (NCA)—a member state’s relevant regulatory body—can be offered in the EU.

With the trading of non-authorized stablecoin being banned, there was confusion over whether basic custody and transfer services were still permitted under the rules. But ESMA, which oversees compliance with MiCA, stated on March 4 that providing custody and transfer services for non-compliant stablecoins does not violate these regulations and that such services do not constitute a public offering or a request for admission to trading of non-compliant asset-referenced tokens (ARTs)—stablecoins that purport to maintain a stable value by referencing another value or right—and e-money tokens (EMTs), stablecoins pegged to a fiat currency.

The complete MiCA regulations related to CASPs came into force on December 30, 2024, with the provisions relating to stablecoins coming into play on June 30. The stablecoin provisions of MiCA brought with them a host of new obligations for issuers and offerors of ARTs and EMTs.

Tether’s dilemma

Some uncertainty over the new rules was accompanied by doubts over whether the world’s leading stablecoin, Tether, would apply for authorization.

This led the Coinbase (NASDAQ: COIN) exchange—the world’s sixth-largest digital asset exchange by daily transaction volume—to delist the stablecoin in mid-December; other major exchanges, such as Binance and Crypto.com, continued to list USDT for EU clients.

Tether had previously made it clear it had no intention—in the immediate future at least—of applying for the appropriate EU license, announcing last November when it discontinued support for its Euro stablecoin (EURT) that “until a more risk-averse framework is in place—one that fosters innovation and offers the stability and protection our users deserve—we have chosen to prioritize other initiatives.”

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