ESMA Gives EU Crypto Platforms Three Months to Wind Down Non-MiCA Stablecoins

ESMA told EU-authorized crypto platforms to stop services in non-MiCA-compliant stablecoins such as $USDT, with customer holdings resolved by Jan. 8, 2027.

In an opinion issued to national regulators on Oct. 8, ESMA said crypto-asset service providers, or CASPs, should not offer services in asset-referenced tokens or e-money tokens that fail MiCA’s authorization, reserve, redemption, governance and disclosure requirements. Keeping noncompliant stablecoins available through authorized platforms would weaken those rules, the regulator argued.

The opinion names no tokens. Its effect, though, lands on two of the market’s biggest tokens: Tether’s $USDT, the biggest stablecoin by market capitalization, and PayPal USD (PYUSD), the third-largest, neither of which is authorized under MiCA. The upshot for European users is that holding those tokens on a regulated platform now has a clock on it.

National regulators should require remaining customer holdings to be resolved “as soon as possible, and no later than three months” after the opinion’s publication, ESMA said, a window that runs out on Jan. 8, 2027.

During the wind-down, platforms may still let customers sell, convert, withdraw, transfer or safekeep the tokens. Purchases, promotion, trading and continued market availability are off the table. The restrictions cover exchange services, trade execution, transfers, custody, administration, advice and portfolio management.

How individual users’ balances are actually resolved, whether by sell-off, conversion or withdrawal, is left to national regulators and the platforms they supervise, so outcomes will vary by country and venue. Several platforms had already restricted $USDT for European users before the opinion landed.

The move extends MiCA enforcement from issuers to the venues themselves, closing the gap where a fully authorized platform could still offer an unauthorized asset. MiCA’s stablecoin rules have applied since June 2024, and its full platform rules took effect on July 1, forcing firms without authorization to stop serving EU clients.