Binance to Restrict Access to Certain Stablecoins in the EU

Cryptocurrency exchange Binance has alerted users to upcoming restrictions due to new stablecoin regulations coming into effect within the European Economic Area (EEA).

Under upcoming MiCA rules some stablecoins will face restrictions as unauthorized stablecoins.

Binance won’t delist any unauthorized stablecoins on spot but will limit their availability for EEA users only on certain products, such as launchpool and earn, and will propose…

— Binance (@binance) June 3, 2024

From June 30, 2024, the provisions of MiCA affecting stablecoins will take effect. Operators will be required to obtain a license from a competent authority of an EU member state and adhere to requirements ensuring the stability of their tokens.

Companies must ensure full disclosure to clients, present a public business model, establish an effective management system including risk management, register with the EBA, create a redemption mechanism, and maintain sufficient reserves.

According to Binance, the restrictions will affect so-called “unauthorized stablecoins.” The exchange plans to implement phased changes in the availability of such assets to “allow EEA users to transition to regulated stablecoins, avoiding market disruptions and complying with MiCA rules.”

From June 30, European clients will have the option to convert “unauthorized stablecoins” in a “sell-only” mode, and purchases will be closed from the same date. Restrictions will also impact copy trading services, participation in Launchpad, Launchpool, Simple Earn, and several other services.

The specific stablecoins affected were not detailed in the announcement.

“This will be the first step towards a new regulatory framework and will have a significant impact on the stablecoin market in the European Economic Area,” Binance emphasized.

Earlier, Bloomberg reported that Kraken is “actively considering” the status of USDT under the new EU regulatory rules. However, exchange representatives stated they have no plans to delist the stablecoin.

In March, journalists, citing the implementation of MiCA, wrote about OKX’s intention to remove USDT trading pairs for EEA clients.

Back in April, MakerDAO founder Rune Christensen warned of potential DeFi challenges in the EU. He noted that European regulators are “very likely” to interpret the bill’s provisions to require a MiCA license.