Binance will restrict the availability of “unregulated stablecoins” in the EU by June 30, in line with the upcoming Markets in Crypto-Assets Regulation (MiCA), according to a statement released on June 3.
The crypto exchange indicated that several stablecoins may not comply with the new regulations and will face restrictions. However, it was not specified which stablecoins would be involved.
Binance said:
“This will be a first step in entering the new regulatory framework and will have a significant impact on the stablecoin market in the EEA.”
Phased approach
Binance plans to implement a phased approach to comply with new stablecoin regulations in Europe.
The exchange allows users to convert holdings in unregulated stablecoins into other digital assets such as Bitcoin, Ethereum, regulated stablecoins and fiat currencies. It added:
“These transitional measures are intended to enable EEA users to transition to regulated stablecoins while avoiding market disruption and complying with MiCA stablecoin regulations. “
Additionally, Binance will implement restrictions across its entire product range, preventing users from accessing new products or services involving unauthorized stablecoins.
At the time of writing, Binance has not yet responded Crypto Slates request for further comment.
Threatening MiCA regulations
The European Union’s MiCA legislation is expected to be fully operational by the end of 2024, with stablecoin regulations set to come into effect this month.
Under these new rules, only electronic money institutions (EMIs) and credit institutions can issue stablecoins, in line with the existing EU Electronic Money Directive (EMD). Major crypto exchanges such as Kraken and OKX are working to comply with these regulations, which may include removing Tether’s USDT stablecoin from their platforms.
Circle and its USDC stablecoin, on the other hand, are well positioned to meet these requirements. Circle applied for an EMI license in December 2023 after obtaining conditional registration in France. This move is part of Circle’s strategy to join the EU’s MiCA regime.
Dante Disparte, Chief Strategy Officer of Circle, emphasized the importance of MiCA, to report:
“MiCA is not crypto’s Y2K moment that can be ignored. There are truly transformative developments underway in digital assets in the world’s third-largest economy.”