Will USDT lose the EU market? New MiCA stablecoin regulations are about to take effect and Binance will take new measures

Starting from June 30, 2024, the EU MiCA Act will bring major 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 take new measures to comply with these regulations.

The impact of the 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 stablecoins within the European Economic Area (EEA) Coin service. This means that many existing stablecoins will be classified as "unauthorized stablecoins" and subject to corresponding restrictions.

• Impact on users

Starting 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 from June 30, 2024, Binance’s currency exchange function will enter “sell only” mode. EEA users can convert unauthorized 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.

• 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. .

Why did Binance take this measure?

• Ensuring Compliance and Market Stability

Binance’s strategy aims to comply with MiCA regulations while avoiding market disruption. Since the number of authorized stablecoins is currently limited and liquidity is insufficient, Binance’s phased transition measures will help prevent users from concentrating on selling unauthorized stablecoins and triggering market panic.

• Assisting market transition

As more authorized stablecoins emerge, the market will gradually shift to these new stablecoins to achieve MiCA’s goals . As the largest centralized exchange by trading volume, Binance says it has a responsibility to protect users and ensure market stability.

USDT’s competitor USDC reposted this announcement at this time

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