The European Securities and Markets Authority (ESMA) clarified the status of custody and transfers of stablecoins that do not comply with the Markets in Crypto-Assets Regulation (MiCA).
On March 3, Binance announced plans to delist nine non-MiCA-compliant stablecoins, including Tether’s UDSt (USDT), for users in the European Economic Area (EEA).
Despite removing the affected tokens for trading, Binance said it will support deposits and withdrawals of non-MiCA-compliant stablecoins after the delisting on March 31.
According to ESMA, a key regulatory body overseeing MiCA compliance in Europe, providing custody and transfer services for non-compliant stablecoins does not violate the new European cryptocurrency laws.
USDt custody and transfer “not explicitly prohibited”
“Under MiCA, custody and transfer services do not in themselves constitute an ‘offering to the public’ or ‘seeking admission to trading’ of non-compliant asset-reference tokens or e-money tokens,” a spokesperson for the ESMA told Cointelegraph on March 4.
“These services are therefore not explicitly prohibited under Titles III and IV of MiCA,” the representative added.
Binance’s non-MiCA-compliant stablecoin delistings would not affect deposits and withdrawals. Source: Binance
Although the ESMA acknowledged that deposits and withdrawals of non-MiCA-compliant stablecoins are not prohibited, it stressed that European crypto asset services providers (CASPs) should “prioritize restricting services that facilitate the acquisition” of such assets, citing its guidance issued on Jan. 17, 2025.
Another area of confusion over MiCA?
Referring to its January guidance, the ESMA reiterated that CASPs are allowed to maintain “sell-only” services — or withdrawals — until March 31 to allow investors to exit their positions.
“Therefore, it is important that all CASPs carefully assess whether any of their services amount to an offer to the public under MiCA,” the agency told Cointelegraph.
ESMA’s confirmation that MiCA does not explicitly restrict USDt custody and transfers — while also advising CASPs to halt withdrawals after March 31 — adds to ongoing confusion over MiCA compliance.
Related: 10 stablecoin issuers approved under EU’s MiCA — Tether is left out
Juan Ignacio Ibañez, a member of the Technical Committee of the MiCA Crypto Alliance, has previously highlighted that MiCA-triggered USDt delistings have been subject to many debates.
An excerpt from a Jan. 18 post on MiCA implications for Tether USDt by Juan Ignacio Ibañez. Source: LinkedIn
The confusion over MiCA implications for non-MiCA-compliant stablecoins is not the only area of debate regarding Europe’s new crypto regulations.
Many industry observers have previously pointed to compliance questions arising from MiCA not addressing crucial industry sectors, such as tokenized real-world assets, cryptocurrency staking and others.
“ESMA and National Competent Authorities are closely monitoring market developments continuously to ensure an orderly transition to the MiCA regime,” a spokesperson for ESMA said.
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