EU’s New Move Affecting USDT Holders: What Happens to Exchange Balances?
The European Securities and Markets Authority has called for non-MiCA-compliant stablecoin services to be discontinued on authorized crypto platforms in the EU, with the process for remaining customer balances to be completed by January 8, 2027, at the latest.
ESMA said in an opinion sent to national regulators on October 8 that services enabling users in the European Union to buy, sell, exchange or increase their balances in non-compliant stablecoins should be halted.
The opinion does not name specific tokens. However, CoinDesk’s report identifies Tether’s USDT and PayPal USD (PYUSD) as stablecoins that have not been authorized under the EU’s Markets in Crypto-Assets Regulation, MiCA.
Three-month limit for existing USDT balances
National regulators have been asked to conclude the process for customer balances remaining on platforms as soon as possible and no later than January 8, 2027. During this transition period, platforms may offer limited services to sell, convert, withdraw, transfer or temporarily custody existing assets.
This permission is not for new purchases or the continuation of normal trading services; it is intended to complete the process of exiting users’ existing balances. Some platforms may also set earlier deadlines.
Which transactions will remain available to users holding USDT on a platform in the EU, and until when, will depend on the platform’s announcements and the national regulator’s implementation.
The scope goes beyond trading pairs
In addition to exchange trading and order execution, ESMA’s opinion covers transfer, custody, administration, advisory and portfolio management services. The limited transitional services allowed for the liquidation of existing balances are addressed separately within this framework.
MiCA’s rules for stablecoin issuers include authorization, reserves, redemption, governance and disclosure requirements. ESMA says that continuing to offer tokens that do not meet these conditions on authorized platforms could undermine these protections.
Some platforms had already restricted USDT trading for their European customers. What stands out in the new opinion is that, in addition to calling for services to be discontinued, it sets a common deadline for remaining balances; national regulators will decide how each platform implements it.