ESMA gives crypto firms 3 months to exit non-compliant stablecoins

What happened

The European Securities and Markets Authority urged EU crypto firms to stop providing services tied to stablecoins that fall outside the Markets in Crypto-Assets Regulation, and it set a three-month deadline to handle existing exposures. National regulators should require companies to clear those exposures as soon as possible and no later than Jan. 8, 2027, which ESMA described as the outside limit for legacy positions.

The Oct. 8 opinion said MiCA-authorised crypto-asset service providers should stop serving EU clients with non-MiCA-compliant stablecoins, and it told national regulators to act quickly.

The guidance covers MiCA-regulated crypto services, including trading platforms, exchange services, order execution, custody, transfers, investment advice and portfolio management. The opinion also names crypto-to-fiat or crypto-to-crypto exchanges, reception and transmission of orders and token placement. It applies to asset-referenced tokens and e-money tokens that do not satisfy MiCA requirements, including applicable exemptions or transitional arrangements.

Regulators may allow limited services to help clients exit existing positions, including liquidation, conversion, withdrawal, transfers and safekeeping, but ESMA said such activities must be temporary and closely supervised. Firms may also continue liquidation, conversion, withdrawal, transfer and safekeeping for customers who already hold affected stablecoins, provided the work supports an orderly exit and does not attract new buyers.

Why it matters

ESMA said crypto firms should implement technical, contractual and organisational controls to prevent EU clients from acquiring or increasing their exposure to unauthorised stablecoins. It also said firms should not maintain or introduce access to non-compliant asset-referenced or e-money tokens through regulated services.

The regulator based its position partly on Article 66(1) of MiCA, which requires crypto service providers to act honestly, fairly and professionally in their clients' best interests. ESMA argued that services involving unauthorised stablecoins expose customers to risks from missing issuer protections that a platform cannot correct on its own.

MiCA requires issuers of qualifying e-money tokens to be authorized as a credit institution or electronic money institution and to meet rules on disclosure and redemption, while asset-referenced tokens face separate rules on reserves, governance and supervision.

ESMA left room for limited services where an immediate shutdown could harm existing customers. Sell-only services, conversions, transfers, withdrawals and safekeeping may continue during wind-down periods, but they cannot be used to bring new buyers into an affected token.

Background

ESMA's update builds on guidance from January 2025, when it called for restrictions on trading and exchange services involving non-compliant stablecoins. The regulator said the new opinion goes further by covering the full range of services.

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