ESMA Sets Deadline for Crypto Firms to Align with MiCA Stablecoin Rules

The European Securities and Markets Authority (ESMA)
has set strict deadlines for crypto firms to act against non-compliant
stablecoins under the new Markets in Crypto-Assets Regulation (MiCA).

In an official statement, ESMA urged crypto asset
service providers (CASPs) to take urgent action by January 31 to restrict or
delist stablecoins that do not meet MiCA’s standards.

The ESMA’s latest push has placed crypto service
providers under pressure as it stresses the need for swift alignment with MiCA,
which officially governs the issuance and management of stablecoins in the
European Union.

The Role of National Regulators

The authority’s communication highlighted the important
role of EU national regulators, known as National Competent Authorities (NCAs),
in ensuring CASPs adhere to the new rules. While no specific stablecoins were named, major industry
players such as Tether’s USDT could be subject to the restrictions due to its
lack of MiCA authorization.

According to the latest guidance from the European
Commission, only stablecoins issued by authorized entities can be legally
offered in the EU. This means that any crypto asset service provider offering
non-compliant stablecoins risks violating the MiCA regulations.

Importantly, CASPs must now refrain from listing or
promoting these non-compliant tokens unless they transition to a “sell-only”
model, a provision intended to reduce market disruptions.

Tether’s USDT Faces MiCA Scrutiny

Tether, which operates the largest stablecoin by
market cap, USDT, has come under scrutiny. A member of the
MiCA Crypto Alliance reportedly confirmed that USDT does not currently hold the necessary
MiCA license, Cointelegraph reported. As a result, he suggested that CASPs must act quickly
to delist USDT, with a hard deadline of March 31 for any stablecoin to be
offered under “sell-only” conditions.

Meanwhile, the crypto industry has voiced concerns
that the interpretation of the regulatory framework remains unclear,
particularly regarding which tokens are considered compliant or non-compliant.

The ESMA’s call to action highlighted a significant
shift in the regulatory landscape, emphasizing the need for swift changes.
Firms that fail to comply by the end of Q1 2025 could reportedly face further
restrictions.

This article was written by Jared Kirui at www.financemagnates.com.