Binance will restrict access to “unregulated stablecoins” in the EU by June 30 to comply with the upcoming Markets in Crypto-Assets Regulation (MiCA), according to a June 3 statement. The exchange noted that several stablecoins might not meet the new regulations but did not specify which ones would be affected.

Binance stated:

“This will be a first step entering the new regulatory framework and it will have a significant impact on the stablecoin market in EEA.”

Phased Implementation

Binance plans to take a phased approach to comply with the new stablecoin regulations in Europe. Users will be able to convert holdings in unregulated stablecoins to other digital assets like Bitcoin, Ethereum, regulated stablecoins, and fiat currencies. The exchange explained:

“These transitional measures aim at allowing EEA users to switch to Regulated Stablecoins while avoiding any market disruption and complying with MiCA stablecoin rules.”

Additionally, Binance will restrict access to new products or services involving unauthorized stablecoins.

As of now, Binance has not responded to CryptoSlate’s request for further comments.

Upcoming MiCA Regulations

The EU’s MiCA legislation is expected to be fully operational by the end of 2024, with stablecoin regulations starting this month. The new rules will allow only Electronic Money Institutions (EMIs) and credit institutions to issue stablecoins, in line with the EU’s Electronic Money Directive (EMD). Major crypto exchanges like Kraken and OKX are working to comply with these regulations, potentially removing Tether’s USDT from their platforms.

Conversely, Circle and its USDC stablecoin are well-prepared to meet these requirements. Circle applied for an EMI license in December 2023 after receiving conditional registration in France, as part of its 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 crypto’s Y2K moment that can be ignored. Really consequential developments are underway for digital assets in the world’s third-largest economy.”