ESMA has told crypto-asset service providers to stop servicing non-MiCA-compliant stablecoins, setting a three-month deadline for remediation.
The European Securities and Markets Authority (ESMA) addresses the notice to national competent authorities (NCAs) across the EU. The document states that crypto-asset service providers (CASPs) authorised under the Markets in Crypto-Assets Regulation (MiCA) should not provide any services in relation to asset-referenced tokens (ARTs) or emoney tokens (EMTs) that do not meet the regulation’s conditions for a lawful offer to the public or admission to trading. Where NCAs identify legacy exposures, they should require remediation as soon as possible and no later than three months after publication, which places the deadline on 8 January 2027.
Scope of the supervisory expectation
The opinion covers all CASP activities, whether provided individually or in combination. These include operating trading platforms, exchange services, order execution, reception and transmission of orders, placing, advice, transfer services, custody, and portfolio management. CASPs are expected to put technical, contractual, and organisational controls in place to prevent EU clients from acquiring or increasing positions in non-compliant tokens.
ESMA’s reasoning rests on Article 66(1) of MiCA, which requires CASPs to act honestly, fairly, and professionally in the best interests of clients. According to the authority, the risks arise from the absence of issuer-level safeguards under Titles III and IV of the regulation, such as redemption rights, reserve-of-assets requirements, governance obligations, and disclosure rules. As a CASP cannot mitigate these risks, offering services in such tokens is presumed incompatible with its obligations. This applies regardless of whether a given service constitutes an offer to the public or admission to trading.
The opinion builds on European Commission Q&A 2404 and an earlier ESMA public statement on the same topic. ESMA also ruled out warnings, disclosures, or client acknowledgements as adequate mitigation, arguing that clients cannot reasonably assess the implications of missing safeguards. The authority further cited the risk of regulatory circumvention, an uneven playing field between compliant and non-compliant issuers, and reduced investor confidence.
Limited residual services remain permitted to support an orderly wind-down. These are restricted to liquidation, conversion, withdrawal, transfer, or safekeeping of existing holdings, and must be time-limited, clearly communicated to clients, and closely supervised. They may not support new acquisitions, promotion, or trading.
Implications for Tether and the stablecoin market
The opinion does not name any token. However, El Salvador-based Tether has not obtained authorisation under MiCA for its USDT stablecoin. MiCA requires large issuers to hold at least 60% of their reserves with banks, while Tether keeps most of its reserves in US government debt. The company has accepted the delisting of USDT by EU exchanges rather than adjust its reserve model, with CEO Paolo Ardoino objecting to the bank-deposit requirement.
However, Circle received a French licence for its USDC token in 2024. The company has since supported an equivalence approach, under which the EU would recognise the home-country rules that an issuer already follows. Patrick Hansen, Circle’s head of EU policy, described equivalence as an alternative to the multi-issuance model, which the official said is currently the only regulatory route available to global stablecoins under MiCA.
The opinion is supervisory guidance rather than new legislation, and it does not affect the competences of the EBA over ART and EMT issuers. ESMA stated that it will monitor, in cooperation with NCAs, how the opinion is applied across member states.
