EU Regulators Give Crypto Firms 90 Days on Stablecoins

The European Securities and Markets Authority published an opinion Oct. 8 requiring national regulators to address legacy exposure to stablecoins that do not comply with the European Union’s Markets in Crypto-Assets Regulation, or MiCA.

National regulators should require MiCA-authorized crypto-asset service providers to resolve the remaining exposure as soon as possible and no later than three months after the opinion’s publication. The deadline is Jan. 8, 2027.

Supervisors may allow firms to provide limited services needed for an orderly wind-down. These services may include selling or converting existing holdings, withdrawals, transfers and safekeeping. Any authorization must be time-limited, clearly explained to clients and closely supervised.

The permitted services cannot support new purchases, promotion, active distribution or the continued availability of a non-compliant stablecoin in the market. Clients therefore do not automatically receive three months of full access. Each national regulator will decide which services, if any, firms may provide during the wind-down period.

ESMA’s opinion applies Article 66(1) of MiCA, which requires crypto-asset service providers to act in their clients’ best interests. The opinion establishes a presumption that MiCA services involving a non-compliant stablecoin conflict with that duty, whether or not the service involves a public offer or admission to trading.

Warnings, disclosures and client acknowledgments would not address risks linked to safeguards missing at the stablecoin issuer level, the opinion states. The guidance covers custody and transfers as well as trading and other services.

ESMA’s Jan. 17, 2025, guidance restricted trading and other services linked to public offers of non-compliant stablecoins while leaving some questions about custody and transfers open. The Oct. 8 opinion adds expectations for those services and sets a timetable for resolving existing exposure.

The opinion does not name specific tokens or issuers. It applies to services provided by regulated firms in the European Union and does not ban people worldwide from owning non-compliant stablecoins. For existing holders, access to liquidation, conversion, withdrawal, transfer or custody services will depend on the firm involved and the decision of its national regulator.