Europe: Binance to restrict access to unregulated stablecoins

Monday, June 3, 2024

While stablecoins such as USDT will still be available for trading, they will be removed from certain features.

Largest cryptocurrency exchange Binance announced on Monday that it would soon restrict the availability of non-EU-regulated stablecoins in Europe. In a release, the company said these measures will take effect from 30 June, when the MiCA (Markets In Crypto-Assets) regulation for stablecoins comes into force.

In practical terms, Binance will not delist these assets but will no longer support them for certain features. For example, it will no longer be possible to acquire unregulated stablecoins via the conversion tool. However, it will still be possible to trade cryptos with them "until further notice".

At present, very few stablecoins are regulated in Europe. From 30 June, their issuers will be required to hold an e-money licence, and only Iceland's Monerium (which issues the EURe) or US exchange Gemini (which issues the GUSD) are notable holders.

Without this precious sesame, most of the major stablecoins available on the market could see their access restricted.

This is the case in particular for USDT issued by Tether ($112 billion in capitalisation), whose boss Paolo Ardoino pointed out the constraints on projects in Europe in April in The Big Whale.

Interviewed after Binance's communication, he tells The Big Whale: "While we are supportive of regulation in general, and are seeking licences in various jurisdictions around the world, the MiCA regulation contains a number of problematic requirements that could make stablecoins licensed in the EU extremely vulnerable and much riskier to exploit."

The executive reiterated the need to "make strategic adjustments, while working closely with regulators, policymakers and industry players in the eurozone".

According to our information, Tether is indeed still in discussions with European regulators, but the case is very complex and would be unlikely to succeed.

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This analysis is not investment advice. It has been prepared without taking into account your personal situation, particularly your financial situation, risk profile, and investment objectives.

Before investing in any product, investors should fully understand the risks involved and consult their own legal, tax, financial, and accounting advisors.

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