Binance to limit unregulated stablecoins in EU ahead of new crypto rules Binance to limit unregulated stablecoins in EU ahead of new crypto rules
Binance said it intends to implement a phased approach to meet the new stablecoin regulations in Europe.
2 min read
Updated: Jun. 3, 2024 at 7:52 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Binance will limit the availability of “unregulated stablecoins” in the EU by June 30, aligning with the upcoming Markets in Crypto-Assets Regulation (MiCA), according to a statement released on June 3.
The crypto exchange indicated that several stablecoins might not comply with the new regulations and will face restrictions. However, it did not specify which stablecoins would be affected.
Binance said:
“This will be a first step entering the new regulatory framework and it will have a significant impact on the stablecoin market in EEA.”
Phased approach
Binance plans to implement a phased approach to meet the new stablecoin regulations in Europe.
The exchange will allow users to convert holdings in unregulated stablecoins to other digital assets such as Bitcoin, Ethereum, regulated stablecoins, and fiat currencies. It added:
“These transitional measures aim at allowing EEA users to switch to Regulated Stablecoins while avoiding any market disruption and complying with MiCA stablecoin rules. “
Additionally, Binance will implement restrictions across its entire product range, preventing users from accessing new products or services involving unauthorized stablecoins.
As of press time, Binance has not responded to CryptoSlate’s request for further comments.
Impending MiCA regulations
The European Union’s MiCA legislation is expected to be fully operational by the end of 2024, and stablecoin regulations will be enacted this month.
Under these new rules, only Electronic Money Institutions (EMIs) and credit institutions can issue stablecoins, aligning with the existing EU Electronic Money Directive (EMD). Major crypto exchanges like Kraken and OKX are working to comply with these regulations, which may include removing Tether’s USDT stablecoin from their platforms.
In contrast, Circle and its USDC stablecoin are well-positioned to meet these requirements. Circle applied for an EMI license in December 2023 after securing conditional registration in France. This move is part of Circle’s strategy to align with the EU’s MiCA regime.
Dante Disparte, Circle’s Chief Strategy Officer, emphasized the significance of MiCA, stating:
“MiCA is not crypto’s Y2K moment that can be ignored. Really consequential developments are underway for digital assets in the world’s third-largest economy.”
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
$3,136.85
Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
USD Coin
$0.99960
USD Coin (USDC) is a stablecoin fully backed by the US dollar and developed by the CENTRE consortium.
Tether
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Launched in 2014, Tether is a blockchain-enabled platform designed to facilitate the use of fiat currencies in a digital manner.
Binance
Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.
Circle
Circle Internet Financial Ltd is a global internet finance company, built on blockchain technology and powered by crypto assets.
Tether Limited
Tether Limited is the company that introduced Tether (USD₮ or USDT), an asset-backed cryptocurrency stablecoin, in 2014.