EU watchdog tells crypto firms to stop servicing stablecoins that fail MiCA rules

The European Securities and Markets Authority (ESMA) has instructed MiCA-authorised crypto firms across the European Union to cease providing services linked to stablecoins that do not meet MiCA requirements. In an official statement, ESMA said the curbs apply across core crypto activities, including trading and exchange services, order execution, custody and administration, crypto-asset transfers, as well as services related to receiving and transmitting orders. The guidance also covers investment advice and portfolio management where relevant. ESMA expects firms to comply whether they offer a single service or bundle multiple activities. National Competent Authorities (NCAs) are tasked with ensuring regulated platforms neither maintain nor roll out services that provide access to noncompliant stablecoins. Regulators are also expected to prevent customers from gaining exposure through other crypto-related services, not only via direct trading. To support enforcement, ESMA said providers should put in place technical, contractual and organisational safeguards designed to block access to restricted tokens and to stop clients from increasing any existing holdings through services offered by authorised firms. For customers who already hold affected stablecoins, ESMA set a three-month timeframe for addressing outstanding exposure, starting from the opinion's publication date. NCAs should require firms to resolve pre-existing positions as quickly as possible within that window. During the transition, firms may offer limited, strictly necessary services to allow clients to liquidate, convert, withdraw or transfer the impacted assets. ESMA also allows temporary safekeeping arrangements to support an orderly wind-down of existing holdings. These measures must be risk-based, time-limited and closely supervised by national authorities. ESMA said national supervisors should enforce the restrictions and ensure firms maintain appropriate controls across their regulated crypto operations.