The European Securities and Markets Authority (ESMA) has mandated that crypto platforms within the EU must eliminate customer access to unauthorized stablecoins, including Tether's USDT, within a three-month timeframe.
Compliance with MiCA Regulations Required for Crypto Platforms
Under new guidelines released by ESMA, authorized crypto platforms are required to cease services that allow EU customers to trade or hold stablecoins that do not adhere to the Markets in Crypto Assets (MiCA) regulations.
This directive does not specify particular tokens but highlights Tether's USDT, the largest stablecoin by market capitalization, as a key example of a non-compliant asset. PayPal USD, another significant stablecoin, is also not authorized under MiCA.
Since MiCA’s stablecoin regulations took effect in June 2024, issuers of dollar- and euro-pegged tokens aimed at EU users must comply with stringent requirements regarding authorization, reserves, redemptions, and disclosures. ESMA refers to these stablecoins as asset-referenced tokens (ARTs) and electronic money tokens (EMTs).
“ESMA believes that crypto-asset service providers (CASPs) should refrain from offering services related to ARTs or EMTs that do not meet MiCA's applicable requirements,” the authority stated.
Some platforms had already limited USDT access for European customers. The comprehensive MiCA regulations for crypto platforms came into effect on July 1, 2026, prohibiting unlicensed firms from servicing clients in the EU.
According to the guidelines, authorized crypto firms must halt services enabling EU customers to purchase, trade, or increase their holdings of non-compliant stablecoins. This includes all forms of trading, custody, and management services.
National regulators are tasked with ensuring that any remaining customer holdings are resolved promptly, ideally within three months of the guideline's release, setting a deadline of January 8, 2027. During this interim period, platforms may assist customers in selling, converting, withdrawing, or securing their existing tokens, but not in buying or trading them.
Customers holding USDT on exchanges must adhere to their respective platform's instructions, with some potentially able to liquidate or withdraw funds during the phase-out period. Others may face an earlier cut-off.
ESMA warned that allowing non-compliant stablecoins on authorized platforms could undermine the reserve, redemption, governance, and disclosure standards mandated by MiCA for compliant issuers. The responsibility to determine how individual platforms manage their remaining customer balances rests with national regulators.