ESMA Clarifies MiCA Rules: Custody of Non-Compliant Stablecoins Permitted Until March 31

On March 4, 2024, the European Securities and Markets Authority (ESMA) clarified that custody and transfer services for stablecoins not compliant with the Markets in Crypto-Assets Regulation (MiCA) are permitted. This announcement follows Binance's March 3 announcement to delist nine non-MiCA-compliant stablecoins, including Tether's USDT, for EEA users, effective March 31. While Binance will still support deposits and withdrawals, ESMA advises crypto asset service providers (CASPs) to limit services facilitating the acquisition of such assets, as per their January 17 guidance. ESMA reiterated that CASPs can maintain 'sell-only' services until March 31, allowing investors to exit positions. The ESMA is closely monitoring market developments to ensure an orderly transition to MiCA.