EU Regulations Could Lead to Mass Stablecoin Delisting

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  • A Binance executive has warned of a potential mass delisting of stablecoins in Europe as the region prepares for new EU regulations
  • MiCA, which is being implemented next year, requires companies offering crypto services in the EU to register in a member state and adhere to risk management and governance processes.
  • Concerns about stablecoin delisting due to MiCA compliance have been expressed, but Binance CEO Changpeng Zhao downplayed these concerns and mentioned plans to launch compliant stablecoins.

A Binance executive has sounded a warning about a potential mass delisting of stablecoins in Europe, as the continent prepares for the implementation of new European Union regulations in the coming months. The regulations, known as the Markets in Crypto Assets (MiCA) framework, have raised concerns among crypto industry participants, particularly regarding their application to decentralized and foreign issuers. However, Marina Parthuisot’s warning has been played down by Binance CEO Changpeng Zhao who said it was taken out of context.

Most Sweeping Regulations Yet Seen

MiCA, finalized in June 2022, represents the most sweeping crypto regulations yet imposed by a regulatory body. The regulations require any company offering crypto-related services in the EU to acquire registration in one of the bloc’s member states, which will allow them to operate across the entire EU.

The European Banking Authority (EBA) and the European Securities and Markets Authority will be in charge of ensuring that crypto platforms adhere to the regulations, including having sufficient risk management and governance processes to prevent another FTX-style collapse.

Stablecoins Impacted

While MiCA covers various aspects of the crypto market, its provisions specifically address stablecoins, which the rules say must be backed 1:1 be auditable reserves. During an online public hearing hosted by the EBA, Marina Parthuisot, Head of Legal at Binance France, expressed concerns about the potential delisting of stablecoins in Europe, noting that no projects have yet been approved for compliance with MiCA.This, she warned, could lead to European exchanges being forced to delist all those that don’t comply, which would almost certainly include Tether (USDT) and possibly the second biggest, USDC

Binance CEO Changpeng Zhao sought to play down the comments, saying the answer had been taken out of context:

Zhao added that Binance is working with partners to launch EUR and other stablecoins in full compliance with MiCA. MiCA is set to be implemented next year, and many crypto operators have been left scratching their heads as they try to work out how to operate within the new rules.