Binance will stick to the red line when MiCA rules for stablecoins (asset tokens) come into effect at the end of the month. The cryptocurrency exchange has alerted users in the European Economic Area of changes they can expect to its service.
MiCA creates uniform rules for issuers of crypto assets that are not already regulated in the EU. In response, Binance divides stablecoins into “regulated” and unauthorized based on their compliance with the new rules.
Binance will gradually transition users
The exchange aims to “seamlessly achieve MiCA’s goals by transitioning users from permissionless stablecoins to regulated stablecoins over time as more regulated stablecoins become available in the market.”
Related: EU publishes draft rules for complaint procedures for stablecoin issuers
No decision has yet been made on which stablecoins are or are not compatible with MiCA. Only a few stablecoins will currently meet MiCA requirements, Binance said.
Binance will primarily rely on a “sell only” strategy to comply with MiCA requirements. The policy will be applied specifically to the Binance Convert feature: “Conversion features for unauthorized stablecoins will be available in “Sell Only” mode.
Binance claims to have 196.6 million users worldwide. He wrote in a blog post:
“Our transitional approach is designed to minimize any potential negative impact on the EEA and global cryptocurrency market that could result from users rushing to exchange their stablecoin holdings while exit routes are limited.”
MiCA could be useful for cryptocurrencies and stablecoins
MiCA was adopted in May 2023. Binance may not be the first exchange to take steps before implementing it. In March, OKX withdrew Tether from Europe without mentioning MiCA. In September, Binance denied reports based on a quote from an interview with Marina Barthuisot, legal director of Binance France, that it intended to delist all stablecoins in Europe.
Expert opinions were divided on MiCA’s impact on the European cryptocurrency market, but many spoke positively about the law, with concerns focused solely on stablecoins. However, European Commission economist Joachim Schwerin told Cointelegraph: “MiCA can help us become more open to stablecoins as a whole.”
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