The European Securities and Markets Authority (ESMA) has set strict deadlines for crypto firms to act against non-compliant stablecoins under the new Markets in Crypto-Assets Regulation (MiCA).
In an official statement, ESMA urged crypto asset service providers (CASPs) to take urgent action by January 31 to restrict or delist stablecoins that do not meet MiCA’s standards.
The ESMA’s latest push has placed crypto service providers under pressure as it stresses the need for swift alignment with MiCA, which officially governs the issuance and management of stablecoins in the European Union.
The Role of National Regulators
The authority’s communication highlighted the important role of EU national regulators, known as National Competent Authorities (NCAs), in ensuring CASPs adhere to the new rules. While no specific stablecoins were named, major industry players such as Tether’s USDT could be subject to the restrictions due to its lack of MiCA authorization.
According to the latest guidance from the European Commission, only stablecoins issued by authorized entities can be legally offered in the EU. This means that any crypto asset service provider offering non-compliant stablecoins risks violating the MiCA regulations.
Importantly, CASPs must now refrain from listing or promoting these non-compliant tokens unless they transition to a “sell-only” model, a provision intended to reduce market disruptions.
Tether’s USDT Faces MiCA Scrutiny
Tether, which operates the largest stablecoin by market cap, USDT, has come under scrutiny. A member of the MiCA Crypto Alliance reportedly confirmed that USDT does not currently hold the necessary MiCA license, Cointelegraph reported. As a result, he suggested that CASPs must act quickly to delist USDT, with a hard deadline of March 31 for any stablecoin to be offered under "sell-only" conditions.
Meanwhile, the crypto industry has voiced concerns that the interpretation of the regulatory framework remains unclear, particularly regarding which tokens are considered compliant or non-compliant.
The ESMA’s call to action highlighted a significant shift in the regulatory landscape, emphasizing the need for swift changes. Firms that fail to comply by the end of Q1 2025 could reportedly face further restrictions.
This article was written by Jared Kirui at www.financemagnates.com.
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