Are Tether USDT Custody and Transfers Not Restricted Under MiCA?

• The European Securities and Markets Authority (ESMA) confirms custody and transfers of stablecoins are not restricted under MiCA. 
• Crypto asset service providers of Europe must restrict offering stablecoin acquisition services.

Markets in Crypto Assets (MiCA) came into effect on December 30, 2024 to regularize the crypto industry in Europe. The increasing adoption and recognition of digital assets has made it mandatory to bring clear regulatory policies. However, its guidance over stablecoin issuance is unclear so far. 

The issue came to surface as Binance delisted several stablecoins, including Tether’s USDT, for EEA users. Binance recently made this announcement to comply with the MiCA policies. The leading exchange will stop offering non-MiCA compliant stablecoins from March 31 for EEA users. However, it will support custody, deposits, and withdrawals of these stablecoins after delisting. 

ESMA Confirms Custody and Services Not Explicitly Prohibited Under MiCA

The European Securities and Markets Authority (ESMA) is one of the regulatory bodies that monitors MiCA compliance in Europe. A spokesperson from ESMA stated that, 

“Under MiCA, custody and transfer services do not in themselves constitute an ‘offering to the public’ or ‘seeking admission to trading’ of non-compliance asset-reference tokens or e-money tokens. These services are therefore not explicitly prohibited under Titles Ⅲ and Ⅳ of regulatory policies.”

Thus, it is confirmed that deposits and withdrawals of non-compliant stablecoins are not restricted by MiCA. ESMA also mentioned that all the crypto asset service providers (CASPs) must restrict non-compliant stablecoin acquisition. The ESMA guidance released on Jan 17, 2025, also confirms the statement of the aforementioned spokesperson. 

Binance is in compliance with these requirements as it clearly mentioned the support of custody, deposits, and withdrawals of these stablecoins. It takes a few months for MiCA to come up with complete regulatory policies in place for the industry. Nonetheless, crypto regulation is moving forward despite little confusions and setbacks in between across the world. 

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