In Brief:
- ESMA has directed authorized crypto firms across the European Union to stop providing services involving stablecoins that violate MiCA requirements.
- The restrictions cover trading, custody, transfers, and investment services, requiring crypto providers to implement safeguards against unauthorized stablecoin exposure.
- National regulators must ensure firms resolve existing non-compliant stablecoin exposures within three months, allowing limited withdrawals, conversions, and transfers only.
The European Securities and Markets Authority (ESMA) has instructed authorized crypto firms to stop offering services involving stablecoins that violate MiCA requirements. According to ESMA’s official press release, the restrictions cover trading, custody, transfers, and other crypto services involving non-compliant stablecoins across the European Union, requiring national regulators to ensure affected firms prevent customers from acquiring restricted tokens or increasing their existing exposure.
ESMA Expands Stablecoin Restrictions Across Trading, Custody, and Crypto Transfers
ESMA’s announcement covers several crypto services, including trading platforms, exchange operations, order execution, investment advice, and portfolio management. Additionally, the restrictions extend to custody, asset administration, crypto transfers, and services involving the reception or transmission of orders.
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The regulator expects firms to apply these requirements regardless of whether they provide individual services or combine several activities. National Competent Authorities must ensure regulated platforms neither maintain nor introduce services providing access to non-compliant stablecoins.
Besides restricting direct trading, authorities must prevent firms from facilitating customer exposure through other crypto-related services. ESMA requires providers to establish technical, contractual, and organizational safeguards that prevent customers from accessing restricted tokens. These measures must also prevent customers from increasing existing holdings through services offered by authorized crypto firms.
EU Regulators Set Three-Month Deadline for Existing Stablecoin Exposure
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ESMA has established a three-month deadline for addressing existing exposure to stablecoins that do not meet MiCA requirements. National authorities must require affected firms to resolve outstanding positions as quickly as possible within that period.
The deadline begins from the opinion’s publication date and applies to remaining pre-existing exposures identified by supervisors. Meanwhile, firms may provide limited services necessary for customers to liquidate, convert, withdraw, or transfer affected assets.
The regulator also permits safekeeping arrangements that support the orderly handling of existing customer holdings. Such services must remain temporary, risk-based, and subject to close supervision by national authorities.
ESMA’s instructions require authorized providers to restrict prohibited services while addressing outstanding customer positions under MiCA. National supervisors must enforce these requirements and ensure firms establish appropriate controls throughout their regulated crypto operations.
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