Regulation
Binance to Restrict Unregulated Stablecoins in the EU Ahead of New Cryptocurrency Rules
Binance will limit the availability of “unregulated stablecoins” in the EU by June 30, aligning with the next Cryptocurrency Regulated Markets (MiCA)according to a statement released on June 3.
The cryptocurrency exchange indicated that several stablecoins may not comply with the new regulations and will face restrictions. However, it was not specified which stablecoins would be affected.
Binance She said:
“This will be the first step into the new regulatory framework and will have a significant impact on the stablecoin market in the EEA.”
Gradual approach
Binance plans to implement a phased approach to meet new stablecoin regulations in Europe.
The exchange will allow users to convert holdings of unregulated stablecoins into other digital assets such as Bitcoin, Ethereum, regulated stablecoins and fiat currencies. He added:
“These transitional measures aim to allow EEA users to transition to regulated stablecoins while avoiding any market disruption and complying with the 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 this writing, Binance has not responded to CryptoSlate’s request for further comment.
Upcoming MiCA regulations
The European Union’s MiCA legislation is expected to be fully operational by the end of 2024 and stablecoin regulations will be issued this month.
Under these new rules, only electronic money institutions (EMIs) and credit institutions can issue stablecoins, in line with the current EU Electronic Money Directive (EMD). Major cryptocurrency exchanges such as 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 Stablecoins 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, highlighted the importance of MiCA, stating:
“MiCA is not cryptocurrency’s Y2K moment that can be ignored. There are really important developments underway for digital assets in the world’s third-largest economy.”