The European Securities and Markets Authority (ESMA) on October 8 requested national supervisory authorities to ensure that crypto firms authorized under MiCA cease providing services related to stablecoins that do not comply with the regulation across the European Union. Existing positions must be addressed as soon as possible and within a maximum of three months, with certain selling, conversion, or withdrawal functions temporarily maintained to support the wind-down process.
ESMA’s new opinion expands control measures from trading and listing to custody, token transfer, advisory, and portfolio management. This move could further restrict access to USDT, the world’s largest stablecoin, on regulated platforms in the EU, while driving liquidity toward MiCA-permitted assets such as USDC.
ESMA Broadens the Stablecoin Restrictions
According to the opinion, national regulators must inspect whether Crypto-Asset Service Providers (CASPs) are assisting EU clients in purchasing, trading, increasing, or maintaining positions in non-compliant stablecoins. The assessment applies across all business operations, from order execution and trading to advisory, asset transfer, and custody.
ESMA stated that this approach does not depend on whether individual services constitute an offer to the public or the admission of tokens to trading under MiCA. The authority cited Article 66(1), which requires CASPs to act honestly, fairly, professionally, and in the best interests of their clients.
CASPs must implement technical, contractual, and organizational measures to prevent clients from making new purchases or increasing exposure, whether services are offered individually or in combination. ESMA noted that merely issuing risk warnings or requesting client acknowledgments is insufficient, as these measures cannot substitute for issuer-level requirements regarding reserves, redemption rights, governance, and disclosures.
Firms Get Three Months to Clear Legacy Exposure
National regulators must require CASPs to address legacy positions as soon as possible and within three months from the publication date of the opinion. The outer deadline is January 8, 2027, although individual regulators or platforms may set earlier deadlines.
During the wind-down process, CASPs can only temporarily maintain existing asset selling, conversion, withdrawal, transfer, or custody functions. New purchases, promotion, active distribution, and regular trading must cease; all remaining services must be time-limited and subject to supervision by national authorities.
The opinion targets services provided by authorized CASPs and does not impose a general ban on individuals holding tokens in self-custody wallets. However, after the respective platform deadline, users may no longer be able to deposit these assets back into an EU CASP.
The Opinion Closes an Earlier Gap
MiCA provisions for stablecoins began applying on June 30, 2024. In its January 2025 guidance, ESMA required platforms to complete restrictions on services supporting purchases of non-compliant stablecoins by the end of that month, while maintaining a sell-only regime through the end of Q1 2025.
Following this guidance, several exchanges delisted trading pairs involving USDT, DAI, and certain other stablecoins for clients in the European Economic Area. However, measures at the time were largely focused on trading, public offerings, and listing; some CASPs continued to offer custody services.
A subsequent report by the European Systemic Risk Board noted that EU investors were still using non-compliant stablecoins, particularly USDT, and suggested that regulators might need to expand measures to custody and other crypto services. The October 8 opinion takes this expanded step, bringing remaining balances after trading termination into supervisory scope.
USDT Is the Largest Token Potentially Affected
USDT is the largest stablecoin potentially affected by the new opinion. Tether does not yet hold issuer authorization under MiCA, and USDT does not appear on the EMT list updated by ESMA on October 7. ESMA does not specifically name USDT or any other token in the document, so application will be based on each issuer’s legal status.
According to DefiLlama, USDT has a market capitalization of around $184.2 billion, accounting for nearly 60% of the $307.1 billion stablecoin market. USDC ranks second with approximately $73.8 billion. The scale of USDT makes EU restrictions involve one of the most critical liquidity sources in the crypto market, even though the direct scope is limited to services provided by authorized CASPs.
Meanwhile, Circle’s USDC and EURC are both listed on the MiCA register, with USDC being the largest compliant stablecoin. The ECB estimates that around 80% of transactions on global centralized crypto exchanges involve stablecoins, reflecting the asset class’s role in payments and cross-market capital flows.
What Comes Next
Implementation now shifts to national supervisory authorities and individual CASPs. Regulators must review outstanding positions, while platforms need to notify clients about deadlines and functions maintained during the wind-down process.
Each CASP may apply a different timeline and resolution plan, but the outer deadline is January 8, 2027. During the transition period, platforms may block new buys immediately while temporarily allowing clients to sell, convert, transfer, or withdraw assets.
ESMA stated it will coordinate with national authorities to monitor implementation progress. Following the wind-down process, stablecoins that remain non-compliant with MiCA will no longer be provided through authorized CASP services in the EU, although users can still hold them outside these platforms.
