ESMA Clarifies Stance on Non-MiCA-Compliant Stablecoins Amid Ongoing Regulatory Uncertainty

ESMA Clarifies Stance on Non-MiCA-Compliant Stablecoins Amid Ongoing Regulatory Uncertainty

The European Securities and Markets Authority (ESMA) has provided new insights into the regulatory status of stablecoins that fail to comply with the Markets in Crypto-Assets Regulation (MiCA), further fueling uncertainty regarding their classification and use.

On March 3, Binance announced its decision to delist nine stablecoins that do not meet MiCA requirements, including Tether’s USDt, for users within the European Economic Area (EEA). While these tokens will no longer be available for trading, Binance confirmed that deposits and withdrawals of non-compliant stablecoins will remain supported beyond the delisting date of March 31.

Custody and Transfers of Non-Compliant Stablecoins Not Explicitly Banned

According to ESMA, the primary regulatory authority overseeing MiCA compliance in Europe, providing custody and transfer services for non-compliant stablecoins does not violate the new European crypto laws.

“Under MiCA, custody and transfer services alone do not constitute an ‘offering to the public’ or ‘seeking admission to trading’ of non-compliant asset-reference tokens or e-money tokens,” an ESMA spokesperson told Cointelegraph on March 4.

The representative further clarified that these services are “not explicitly prohibited” under Titles III and IV of MiCA. However, ESMA emphasized that European crypto asset service providers (CASPs) should focus on limiting services that enable the acquisition of non-MiCA-compliant stablecoins, referencing its guidance issued on January 17, 2025.

Growing Uncertainty Over MiCA Implementation

Citing its January guidelines, ESMA reiterated that CASPs are permitted to maintain “sell-only” services—allowing users to withdraw their holdings—until March 31 to facilitate investor exits.

“As a result, it is crucial for all CASPs to carefully evaluate whether any of their services qualify as an offer to the public under MiCA,” the agency stated.

The apparent contradiction in ESMA’s stance—acknowledging that MiCA does not explicitly prohibit USDt custody and transfers while simultaneously advising CASPs to cease withdrawals after March 31—has further deepened the confusion surrounding compliance requirements.

Juan Ignacio Ibañez, a member of the Technical Committee of the MiCA Crypto Alliance, previously pointed out that the delisting of USDt due to MiCA has been a subject of intense debate.

Regulatory Gaps Persist in Europe’s Crypto Framework

The ambiguity surrounding the treatment of non-MiCA-compliant stablecoins is just one of several unresolved issues within the new regulatory framework. Industry experts have also raised concerns about MiCA’s lack of clear provisions for critical sectors such as tokenized real-world assets, cryptocurrency staking, and other emerging financial innovations.

“ESMA and National Competent Authorities are continuously monitoring market developments to ensure a smooth transition to the MiCA regime,” an ESMA spokesperson stated.

As the March 31 deadline approaches, industry participants remain in a state of uncertainty, awaiting further regulatory clarity on how MiCA will ultimately shape the European crypto landscape.