The European Securities and Markets Authority (ESMA) has directed crypto asset service providers (CASPs) to restrict stablecoins that do not comply with the European Union’s Markets in Crypto-Assets Regulation (MiCA). This directive aims to ensure that only authorized stablecoins are offered within the EU market.
ESMA has set a deadline of January 31, 2025, for CASPs to implement these restrictions. However, the authority has allowed a grace period until the end of the first quarter of 2025 for CASPs to maintain “sell-only” services for non-compliant stablecoins, enabling investors to liquidate or convert their holdings.
The ESMA’s guidance clarifies that MiCA prohibits the offering of stablecoins by issuers who are not authorized under the regulation. This includes the requirement for CASPs to obtain written consent from the issuer before offering such tokens to the public.
This regulatory action has significant implications for stablecoin issuers and users within the EU. Notably, Tether’s USDt (USDT), the largest stablecoin by market capitalization, does not hold a MiCA license and is considered non-compliant. As a result, CASPs may need to delist USDT by the January 31 deadline, except for “sell-only” operations.
