Stablecoins And MiCA : Europe Tightens Its Grip On Digital Assets

The European Union is reinforcing its role as a pioneer in financial regulation and addressing a crucial issue: the regulation of cryptocurrencies. With the arrival of the MiCA regulatory framework (Markets in Crypto-Assets Regulation), ESMA, the financial markets authority, calls for rapid action against stablecoins that do not comply with the new standards. This regulatory shift, aimed at protecting investors and ensuring transparency, heralds a major overhaul of the European crypto ecosystem and poses significant challenges for issuers as well as trading platforms.

Growing pressure for compliance

ESMA has issued a request to crypto-related service providers to limit the circulation of stablecoins that do not comply with the requirements of the MiCA framework. In a statement published on January 17, the European authority specifies that assets classified as “asset-referenced tokens” (ART) or “electronic money tokens” (EMT) must be completely removed from European platforms by March 31, 2025. However, a transitional period has been provided to allow investors to liquidate their positions or convert their assets, through an operational mode limited to “sale only,” available until this deadline.

In this context, national authorities, referred to as “competent authorities,” will play a central role through the supervision of the transition. Their mission will be to ensure that issuers of stablecoins meet compliance obligations, notably through registration and obtaining the necessary authorizations within the European Union. Furthermore, companies wishing to offer these assets to the public or introduce them on trading platforms must obtain explicit written authorization from the issuers. This process, at the heart of the MiCA regulation, has been designed to ensure greater transparency and effectively protect investors from the risks associated with cryptocurrencies.

An uncertain future for some stablecoins

The restrictions imposed by ESMA could profoundly disrupt the future of major stablecoins, particularly Tether (USDT). According to Juan Ignacio Ibañez, a member of the technical committee of the MiCA alliance, this stablecoin, which remains the most widely used in the world, does not meet the compliance criteria required by European regulation. “No trace of USDT should remain in the European Union after March 2025, even under the sale only mode,” he stated on January 19, 2025, in a post on the LinkedIn platform. This statement sheds light on the challenges faced by issuers and exchange platforms.

In light of this situation, players like Gemini have expressed their concerns regarding certain ambiguities surrounding the application of the rules. They have also emphasized that a dialogue is ongoing with national regulators to anticipate disruptions and mitigate impacts on their users. However, this transition promises to be particularly delicate. Companies must adapt to a rigorous regulatory framework while also maintaining the trust of their clients accustomed to stablecoins now deemed non-compliant. These challenges could accelerate structural transformations within the crypto sector in Europe.

This regulation represents far more than just a compliance issue. It could redefine the European market for stablecoins. By imposing strict standards, the European Union aims to build a more transparent and secure financial system. However, the potential removal of major players like Tether risks disrupting the ecosystem and offering an opportunity for the emergence of compliant alternative solutions. This ambitious regulatory framework reaffirms Europe’s role as a global leader in crypto regulation, setting milestones that other regions may adopt to harmonize their markets.