Binance to limit unregulated stablecoins in EU ahead of new crypto rules
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.”
