Representatives of the European Securities and Markets Authority (ESMA) have spoken out regarding the legal status of stablecoins falling outside of the Market in Cryptoassets Regulation (MiCA), adding a new dose of ambiguity to an already murky regulatory landscape.
Shortly before, one of the largest centralised exchanges, Binance, announced a procedure to delist MiCA-compliant staples, including Tether's flagship USDT, for users in the European Economic Area (EEA).
However, despite the scheduled 31 March trading exclusion, Binance has made it clear that it will continue to provide deposits and withdrawals using "unwanted" staples, adding fuel to the fire of regulatory uncertainty.
According to ESMA's position, the provision of custodial and transfer services for such assets does not fall under a breach of European cryptocurrency law, leaving room for manoeuvre for exchanges and users alike.
"Focusing on MiCA, the provision of custody and transaction services for non-compliant assets, do not constitute a public offer or admission to trading," commented an ESMA spokesperson.
"These services are therefore not explicitly prohibited under Titles III and IV of MiCA."
While the Regulator has made such statements, it has also emphasised that European cryptoasset service providers (CASPs) are obliged to limit the ability to interact with these types of assets, referring to its guidance issued on 17 January 2025. This requirement must be met by 31 March for investors to successfully close out their positions.
At the same time, ESMA's confirmation that MiCA requirements do not restrict interactions involving custody or transactions involving USDT, together with the recommendation for CASP to suspend withdrawals before 31 March, adds ambiguity to this issue.
Juan Ignacio Ibáñez, who is a member of MiCA's tech committee, has previously said that the delisting of USDT due to regulatory requirements will be a point of contention.
Confusion over MiCA's implications for incompatible stablecoins is not the only area of debate regarding Europe's new cryptocurrency regulations.
Many crypto analysts have already said that there will be questions about MICA compliance, because it does not provide clarity on the regulation of RWAs, and other industries.
"ESMA and other competent authorities are closely monitoring the market environment to ensure a centralised transition to the MiCA regime," said an ESMA spokesperson.
