The European Securities and Markets Authority (ESMA) said in guidance issued as an opinion to regulators in European Union member states that crypto firms should stop providing services involving stablecoins that aren’t compliant with the Markets in Crypto-Assets Regulation (MiCA) framework, including holding them for customers
ESMA said Thursday that national regulators should require companies to address remaining exposures to non-compliant stablecoins as soon as possible and no later than Jan. 8, 2027, setting a three-month deadline to address existing exposures
ESMA’s January 2025 guidance said custody and transfers of non-compliant stablecoins could remain available. The new opinion extends its supervisory expectations to those services, allowing them only temporarily to help customers exit existing positions
“Crypto-asset service providers (CASPs) authorised under MiCA should cease providing services related to non-MiCA-compliant stablecoins to clients in the European Union,” ESMA said
The guidance covers services regulated under MiCA, including crypto trading, holding assets for customers, transfers, investment advice and portfolio management, with the ESMA stating that firms should stop EU customers from buying non-compliant stablecoins or adding to their holdings
The guidance states regulators may temporarily allow firms to help customers sell, exchange or withdraw existing holdings and adds that firms may also continue holding or transferring those assets during that process, under close regulatory supervision
ESMA said firms should complete the process as soon as possible and no later than Jan. 8, 2027, but it added that national regulators can set earlier deadlines
ESMA did not name individual tokens, but Coinbase identified Tether’s USDt (USDT) and PayPal’s stablecoin, PayPal USD (PYUSD), as non-MiCA-compliant and said its European Economic Area customers should withdraw affected balances by Oct. 30. Coinbase said remaining balances will be automatically converted into USDC or another supported crypto asset or currency
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