The most outstanding

• New stablecoin rules imposed by the EU Cryptoasset Markets Framework (MiCA) will come into force on June 30, 2024, affecting the stablecoin market and digital assets in general across the European Economic Area (EEA). This blog describes Binance's approach to complying with the new regulations.

• Binance will restrict the availability of unauthorized stablecoins to EEA users, implementing phased changes and product restrictions to ensure compliance and minimize market disruption.

• Binance's approach aims to seamlessly meet the goals of the MiCA regulation by transitioning unauthorized stablecoins to regulated stablecoins over time as more regulated stablecoins become available on the market.

On June 30, 2024, new MiCA stablecoin rules will come into force across the European Economic Area (EEA). This will be a first step to enter the new regulatory framework and will have a significant impact on the stablecoin market in the EEA. As it is important for our users to understand the impact of the upcoming changes, below we will explain some of the important details about what the new rules are and how Binance is implementing them.

How will MiCA affect you as a user?

From June 30, 2024, stablecoins will be regulated in the EEA, which in practice means that only certain regulated companies will be able to issue and offer stablecoins to the public (those stablecoins will be “regulated stablecoins”).

Several existing stablecoins may not fall into this category and will therefore be subject to certain restrictions. They will be categorized as “unauthorized stablecoins.”

Binance will be making phased changes to the availability of unauthorized stablecoins, detailed below. These transitional measures are intended to allow EEA users to switch to regulated stablecoins, as well as avoid any market disruption and comply with the MiCA stablecoin rules. 

In summary, starting June 30, 2024, Binance will restrict the availability of unauthorized stablecoins to EEA users across its product offering. Specific:

1. Binance Convert: Unsanctioned stablecoin conversion features will be available in “sell only” mode. For example, users in the EEA will be able to convert USDT to other tokens (such as BTC or a regulated stablecoin).

2. Spot Trading: Spot trading pairs with unauthorized stablecoins will be available until further notice. 

3. Wallet: you can withdraw or deposit your stablecoins to or from your Binance wallet. 

For more details, keep reading below. 

What are the rules for MiCA stablecoins?

Starting June 30, 2024, MiCA requires that only electronic money institutions (EMIs) and credit institutions (or simply banks) can carry out certain activities with stablecoins.

Ultimately, this means that in the EEA, only EMIs and banks will be able to:

1. Issue/accumulate stablecoins.  

2. Communicate offers to encourage the purchase of stablecoins.  

3. Ask trading platforms to list their stablecoins. 

For more information, you can consult the official MiCA summary prepared by public authorities, available here. 

How does Binance comply with MiCA stablecoin regulations?

Binance is committed to complying with any and all relevant regulatory requirements, while protecting users from any loss or market disruption.

 Therefore, starting June 30, 2024, Binance will implement the following measures: 

• General Product Restrictions – Binance will apply restrictions across its entire product offering. These restrictions will prevent users from accessing new products or service offerings that are related to unauthorized stablecoins. All Binance products are affected. For more information, click [here]. 

• Binance Convert: Unauthorized stablecoin conversion features will remain in “sell only” mode. In practice, this means that EEA users will be able to sell unauthorized stablecoins for: other digital assets (such as bitcoin or ether), regulated stablecoins or fiat currencies (depending on the availability of fiat channels in your jurisdiction). Thanks to this option, users will be able to easily switch to regulated stablecoins. It will not be possible to purchase unauthorized stablecoins with Convert starting June 30, 2024. 

• Spot Trading: Spot trading pairs with unauthorized stablecoins will remain available until further notice. During the interim period, unauthorized stablecoin digital asset trading pairs will coexist with regulated stablecoin trading pairs.

• Wallet: Custody and wallet services for unauthorized stablecoins will continue. You will be able to withdraw or deposit your stablecoins to or from your Binance wallet. 

Why is Binance taking this approach?

Binance's approach aims to comply with MiCA requirements while avoiding market disruptions. Our transitional strategy has been designed to minimize any potential detrimental impact to the EEA and global cryptocurrency market that may arise from users rushing to exchange their stablecoin holdings while limited exit avenues exist.  

There are currently few regulated stablecoins with limited liquidity, which may not be enough to support a sudden demand across the sector. In the coming months, we expect to see more regulated stablecoins available on the market, which will allow the market to completely shift to regulated stablecoins over time, ensuring that the objectives of the MiCA are met.

As the largest centralized exchange by trading volume, we take seriously our responsibility to protect our users and safeguard market stability, ensuring that our actions do not create market panic and instability, while meeting our regulatory obligations. . Our approach described above aims to meet this goal.