Binance takes steps to restrict “unregulated” stablecoins in Europe

By Hannah Perez

Users residing in the European Union will not have access to certain stablecoins starting June 30. Binance did not specify which stablecoins the measure covers, but said it is in compliance with MiCA regulation.

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Binance users in the European Union will no longer have access to certain stablecoins
Binance will remove stablecoins “not authorized” by the EU from its commercial listing
The measure, which applies only in Europe, seeks to comply with the new MiCA regulations

Binance, The world’s largest cryptocurrency exchange is preparing to implement new, stricter measures in an effort to comply with new European regulations.

In a notice this Monday, Binance announced that it will implement new restrictions on the trading of certain stablecoins to its users in Europe. The statement cites the Cryptoasset Markets Regulation (MiCA), the cryptocurrency regulatory framework of the European Union (EU), whose provision relating to stablecoins It will come into force at the end of June.

“This will be a first step to enter the new regulatory framework and will have a significant impact on the stablecoin market in the European Economic Area“reads the statement collected by The Block.

Without going into details, the platform announced that the availability of stablecoins that are considered “unregulated” will be limited to users residing in EU member countries.

Only tokens issued by the “regulated companies“will be available to the public and it is possible”several existing stablecoins do not fall into this category and will therefore be subject to certain restrictions“added the company.

The measure will be applied progressively over the coming weeks, although Binance has already urged users to change their holdings into stablecoins”unauthorized” for other cryptocurrencies such as Bitcoin either Ethereum.

According to the report, the option to purchase stablecoins unregulated in Europe will be disabled as of June 30. The company did not specify what the tokens that fall under this category, but could include USDT, issued by Tetherthe biggest stablecoin of the market with a current capitalization of more than USD $100 billion.

Stablecoin regulation comes into effect this month

A report from last year had already anticipated that Binance was contemplating removing certain stablecoins from its commercial listing in Europe in order to comply with new regulations. More recently, last month, a report by Bloomberg revealed that Kraken could be analyzing the same possibility for its European users.

MiCA became law in 2023 after European lawmakers spent three years developing cryptocurrency-specific regulation. Taking a comprehensive approach, the framework covers cryptocurrency companies such as issuers, exchanges and wallet providers, and introduces a licensing system between all members of the block.

While most regulations will come into effect by the end of 2024, a one-off provision on MiCA stablecoins will come into effect before July.

The European Banking Authority (EBA) has been working with the EU markets regulator ESMA to establish rules applicable to stablecoins such as USDT under MiCA.

In accordance with Bloombergthe EBA was tasked with overseeing the rules on stablecoins, which will require issuers of this type of asset to hold a license from a national financial authority in at least one member state before June 30. Issuers will also be required to meet higher standards on corporate governance, conflicts of interest and reserve management, such as having at least a third of all funds in an independent financial entity.

OKX, another major cryptocurrency exchange, already limited the functionality of the USDT stablecoin for its European customers earlier this year; although at the time he did not mention regulation as a reason for the change.

As to Binance, the company has shown increased regulatory compliance efforts since it was hit with a historic $4.3 billion fine in the United States last year and its former CEO, Changpeng Zhao, pleaded guilty to criminal charges. Zhao was sentenced to four months in prison, which he began serving this week.

Article by Hannah Estefanía Pérez / DailyBitcoin

Edited image of Unsplash

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