From June 30, 2024, new MiCA regulations regarding stablecoins will come into force. The introduction of this regulatory framework will have a significant impact on the stablecoin market in the European Economic Area (EEA).
What do these changes mean, especially in the context of using crypto exchanges, trading in pairs with stablecoins and using exchange products on the example of the #Binance exchange (information confirmed by Binance).
From June 30, 2024, stablecoins will be regulated in the EEA. This means that only regulated companies will be able to issue and offer stablecoins to the public, which will be called "regulated stablecoins". Several existing stablecoins may not fall into this category and will therefore be subject to certain restrictions. These will be classified as unauthorized stablecoins.
Gradual Changes in the Availability of Unauthorized Stablecoins
Binance will implement gradual changes to the availability of unauthorized stablecoins to enable EEA users to transition to regulated stablecoins while avoiding market disruption and maintaining compliance with MiCA regulations.
Specific Impact on Binance Products:
🔶Binance Convert:
From June 30, 2024, conversion features for unauthorized stablecoins will only be available in sell-only mode. This means that users will be able to sell unauthorized stablecoins for other digital assets (BTC, ETH and other altcoins), regulated stablecoins or fiat currencies. It will not be possible to purchase unauthorized stablecoins.
🔶Trade spot:
Trading pairs with unauthorized stablecoins will remain available until further notice. During the transition period, trading pairs with unauthorized stablecoins will coexist with trading pairs with regulated stablecoins.
🔶Wallet:
Custody and wallet services for unauthorized stablecoins will continue. Users will still be able to deposit and withdraw unauthorized stablecoins from their Binance wallet.
🔶 Futures:
Binance Futures has introduced a new credit trading mode on its platform, offering users in eligible regions a new option to directly deposit supported crypto assets such as #BTC , #ETH and #BNB as collateral for futures contracts with a margin in USDⓈ. Binance Futures Credit Trading Mode works in Cross Margin and Multi-Asset mode by default.
How does Binance Futures credit trading mode work?
Under Binance Futures Credit Trading Mode, all USDT or USDC contracts will display PNL (Profit and Loss), Margin and Fees as Credits marked as BNFCR. Any stablecoin balance in your Futures wallet such as USDT, USDC, FDUSD will have the option to convert to BNFCR at a 1:1 ratio at any time.
Please note that Binance Futures credit trading mode is currently only available for USDⓈ-M contracts. In this mode, only BTC, ETH and BNB can be used for transfers between Futures wallets and other wallets. BNFCR cannot be withdrawn, but can be converted to BTC, ETH or BNB before making a withdrawal (more info on how the conversion works on the Binance website)
General Product Restrictions:
🔶Rewards:
Platform-wide rewards such as reward hub, campaigns and referrals will be changed to regulated stablecoins, BNB or other non-stablecoin tokens.
🔶Commission/Refund from Referral:
From June 24, 2024, commissions or referral returns for Spot and Margin will be paid in BNB.
🔶Spot copy trading:
Spot copy trading for EEA users will cease to apply from 23:59 (UTC+3) on June 29, 2024.
🔶Margin:
New lending of unauthorized stablecoins will be blocked and the transfer of these stablecoins as Margin collateral will be blocked.
🔶Launchpad i Launchpool:
The FDUSD pool will no longer be available to EEA users.
🔶Simple Earn: New Simple Earn subscriptions featuring unauthorized stablecoins will be blocked before June 29, 2024.
🔶Binance Loans and VIP Loans:
New loan subscriptions containing unauthorized stablecoins will be blocked before June 29, 2024.
🔶Auto-Investments:
New Auto-Inwestycje subscriptions with unauthorized stablecoins will be blocked.
🔶Double Investments:
New subscriptions to Dual Investment products with unauthorized stablecoins will be blocked before June 29, 2024.
🔶Cloud Mining:
New subscriptions containing unauthorized stablecoins will be blocked before June 29, 2024.
🔶Binance Pay:
EEA users will not be able to send or receive any unauthorized stablecoins.
🔶NFT:
NFT purchases involving unauthorized stablecoins will be blocked.
🔶Karta
Gift cards will only be available to EEA users in the form of regulated stablecoins or other digital assets.
Summary
These changes are intended to ensure compliance with MiCA's new stablecoin regulations and enable a smooth transition for users to regulated stablecoins.
How to prepare for changes?
Knowing the above changes, I think it is worth closing products that will be blocked immediately after June 30. However, it seems that changes in trade, i.e. what we use most often, will be introduced gradually. However, the question is which stablecoins will be finally authorized and which will not... We will have to wait for the full answer until the end of the year, when all MiCA changes are to be implemented. I bet that USDT will fight for the European market, but who knows...
