From June 30, 2024, the EU MiCA bill will bring significant changes to the stablecoin market. This new regulation will not only affect stablecoins, but also digital asset markets across the European Economic Area (EEA). Binance will be taking new measures to comply with these regulations.
Impact of new EU MiCA regulations
MiCA’s stablecoin rules?
From June 30, 2024, MiCA stipulates that only electronic money institutions (EMIs) and credit institutions (such as banks) can issue and provide stablecoin services within the European Economic Area (EE). This means that many existing stablecoins will be classified as "unauthorized stablecoins" and subject to corresponding restrictions.
Impact on users
From June 30, 2024, users in the EEA region will only be able to use "authorized stablecoins". Unauthorized stablecoins will be subject to a series of restrictions, including prohibiting use of new products or services. Binance said it will implement phased changes to help users smoothly transition to licensed stablecoins and avoid market turmoil.
Binance’s response
In order to comply with MiCA regulations, Binance will implement restrictions on all products involving unauthorized stablecoins to prevent users from participating in new related products or services.
Starting June 30, 2024, Binance’s currency exchange function will enter “sell only” mode. EEA users can convert unlicensed stablecoins into other digital assets (such as Bitcoin or Ethereum), authorized stablecoins, or fiat currencies (subject to the availability of fiat currency channels). The ability to purchase unauthorized stablecoins will no longer be available.
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Spot Trading
Unauthorized stablecoin pairs in spot trading pairs will remain available until further notice. Will coexist with authorized stablecoins during the transition period.
Wallet service
Binance’s unlicensed stablecoin custody and wallet services will continue to operate, and users can still deposit and withdraw their stablecoins.
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Why did Binance take this step?
Ensure compliance and market stability
Binance’s strategy aims to comply with MiCA regulations while avoiding market disruption. Due to the current limited number of authorized stablecoins and insufficient liquidity, Binance’s phased transition measures will help prevent users from concentrating on selling unauthorized stablecoins and triggering market panic.
Assist market transition
As more authorized stablecoins emerge, the market will gradually shift towards these new stablecoins, achieving the goals of MiCA. As the largest centralized exchange by trading volume, Binance says it has a responsibility to protect users and ensure market stability.
USDT competitor USDC reposted this announcement at this time
This article Will USDT Lose Big Market? The EU MiCA new stablecoin regulations are about to take effect: How Binance ensures compliance first appeared on Chain News ABMedia.
