Key takeaways

  • The new stablecoin provisions of the EU's Markets in Crypto-Asset (MiCA) Regulation will come into force from June 30, 2024. They will affect stablecoins as well as digital asset markets in the European Economic Area (EEA). This blog post describes Binance's approach to complying with the new rules.

  • In summary, Binance will limit the use of unregulated stablecoins for users residing in the EEA by implementing progressive restrictions on the range of digital asset products offered within the EEA, in order to comply with rules on stablecoins while minimizing market disruption. 

  • Binance intends to comply with the objectives of the MiCA Regulation by, in particular, encouraging users to gradually move towards a regulated stablecoin offering, as regulated stablecoins emerge and are offered to the public on the market. 

  • Please note: Binance will not delist USDT from its Spot trading product.

On June 30, 2024, the new provisions of the MiCA Regulation on stablecoins will come into force in the European Economic Area (EEA). This will be the first step in implementing the new regulatory framework, which will have significant implications for the stablecoin market in the EEA. We wanted to make sure our users understand the consequences of the new rules and upcoming changes; That’s why we explain some important details below along with Binance’s implementation of the new rules.

How does MiCA impact users?  

From June 30, 2024 in the EE territory, stablecoins (defined as “electronic money tokens” in the MiCA Regulation) will be regulated, which in practice means that only certain companies regulated by the competent authorities will be permitted to issue and offer stablecoins to the public (these stablecoins will become “Regulated Stablecoins”).

Certain stablecoins currently offered on the market may not fall into this category and will therefore be subject to certain restrictions: they will be placed in the category of “Non-Regulated Stablecoins”.

Binance will implement progressive restrictions on the supply of available Unregulated Stablecoins. These restrictions are set out in detail below. Binance will implement transitional measures which aim to allow users residing in the EEA to move to a Regulated Stablecoin offering without suffering from possible market disruptions and while complying with the provisions of the MiCA regulation on stablecoins. 

To summarize, from June 30, 2024, Binance will implement certain restrictions on Unregulated Stablecoins for users residing in the EEA across its entire product range. 

Please note in particular:

  1. Spot: Spot trading pairs with Unregulated Stablecoins will remain available until further notice. Binance will not delist USDT as of June 30, 2024. 

  2. Binance Convert: Convert features will only be available for selling Unregulated Stablecoins. For example, users in the EEA will be able to sell USDT against other assets (for example, against bitcoins).

  3. Wallet: Withdrawal and deposit of stablecoins to your Binance account will still be supported. 

To learn more about these restrictions, keep reading! 

What are the provisions of the MiCA Regulation regarding stablecoins?

From June 30, 2024, the MiCA Regulation requires that certain activities involving stablecoins be carried out only by electronic money institutions (EMIs) or credit institutions (or, more simply, banks).

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

  1. issue stablecoins;  

  2. make promotional communications around stablecoins;

  3. ask trading platforms to list their stablecoins. 

You can consult the official summary of the MiCA regulation drawn up by public authorities here to find out more. 

How does Binance comply with the MiCA provisions regarding stablecoins?

Binance is committed to complying with all applicable regulatory requirements while protecting users from potential market disruptions.

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

  • General Product Restrictions: Binance will implement restrictions across its entire product offering, the purpose of which is to limit the ability of users to subscribe to new products or service offerings involving Unregulated Stablecoins . All Binance products are affected. To learn more about these restrictions on a product-by-product basis, click [here] to learn more. 

  • Binance Convert: Convert features will remain available in “sale only” mode for Unregulated Stablecoins. This means in practice that users in the EEA will be able to sell Unregulated Stablecoins for other digital assets (such as Bitcoin or Ether), Regulated Stablecoins or euros. Users will thus be able to easily switch to a Regulated Stablecoins offer. The purchase of Unregulated Stablecoins through Binance Convert will no longer be possible from June 30, 2024. 

  • Spot Trading: Spot trading pairs with Unregulated Stablecoins will remain available until further notice. Binance will not delist USDT as of June 30, 2024. During this transitional period, digital asset trading pairs with Unregulated Stablecoins will coexist with trading pairs with Regulated Stablecoins.

  • Custody: custodial services on Unregulated Stablecoins will be maintained. You will be able to continue to withdraw or deposit Unregulated Stablecoins to or from your Binance Account. 

Why are we adopting these measures?

Binance intends to comply with the requirements of the MiCA regulation while avoiding possible market disruptions. Our transitional approach has been designed to minimize any potential negative impact on the EEA and digital asset markets that could be caused by a significant number of users wishing to sell their stablecoins, while having limited options. 

The current offer of Regulated Stablecoins is still underdeveloped. Current limited liquidity may not be enough to meet sudden demand from the entire sector. Over the next six months, we expect more Regulated Stablecoins to hit the market, eventually replacing Unregulated Stablecoins, in line with the objectives of the MiCA Regulation.

As an exchange platform, we are committed to protecting our users and preserving market stability. We ensure that our measures do not cause panic and market instability, and comply with our regulatory obligations. It is with this objective in mind that we have adopted the approach described above.