The European framework for crypto-assets takes a step forward with a deadline for platforms. ESMA requires cryptocurrency firms in the European Union to address their exposures to non-MiCA-compliant stablecoins. National regulators will therefore have to supervise this transition within a time frame, while service providers will have to review several services offered to European customers. This measure concerns in particular the conservation, transfers and operations still allowing the holding of certain tokens which do not comply with European rules.
In brief
- ESMA gives European crypto platforms until January 8, 2027 to deal with non-compliant stablecoins.
- Companies must stop services related to stablecoins that do not respect the European framework.
- A transitional period still allows clients to sell, exchange or withdraw their existing assets.
- Coinbase notably considers USDT and PYUSD to be non-compliant and sets a deadline of October 30 for its European customers.
MiCA imposes a gradual withdrawal of non-compliant stablecoins
In its opinion, ESMA asks cryptocurrency service providers to cease services related to stablecoins that do not comply with MiCA. National authorities should require companies to address their remaining exposures as soon as possible. The set deadline cannot exceed January 8, 2027, even if regulators may choose an earlier date.
This position expands the requirements presented by ESMA in January 2025. At that time, the custody and transfer of certain non-compliant stablecoins could still remain possible. From now on, these services can only continue temporarily, in particular to allow clients to liquidate their existing positions within a supervised framework.
New directions cover several activities regulated by MiCA. They concern in particular trading, custody of assets for clients, transfers, investment advice and portfolio management. Platforms must also prevent their European customers from purchasing non-compliant stablecoins or increasing their existing holdings.
Three months to process remaining exposures
The timetable gives companies around three months to organize the exit of the affected positions. During this period, national authorities may authorize certain MiCA-related services to enable clients to sell, exchange or withdraw their assets. Companies may continue to temporarily retain or transfer these assets, subject to close regulatory oversight.
However, ESMA asks providers to complete this process as quickly as possible. January 8, 2027 constitutes the common deadline announced by the European authority. However, national regulators retain the possibility of imposing earlier deadlines according to their supervisory framework.
ESMA did not cite specific tokens in its opinion. For its part, Coinbase has identified Tether’s USDt and PayPal USD as non-MiCA-compliant stablecoins. For its customers in the European Economic Area, Coinbase has set October 30 as the deadline for withdrawing affected balances. The remaining amounts should then be automatically converted to USDC or another available crypto asset or currency.
This development also reinforces the distinction between authorized assets and those which are gradually leaving the European market. Platforms must therefore adapt their procedures, offers and controls in order to comply with MiCA throughout this transition period within the European market.
The new deadline should therefore accelerate the adjustments of European platforms. Companies will have to identify the positions concerned, inform their clients and organize the authorized operations during the transitional period. For users, the priority now is to check the assets concerned and the terms offered by their platform. MiCA is thus entering a more concrete phase of application, with a deadline which brings closer the definitive treatment of non-compliant stablecoins.
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