ESMA proposes ending EU custody and transfer services for non-compliant stablecoins
ESMA has proposed extending MiCA restrictions on non-compliant stablecoins from trading to all licensable services, including custody and transfers. If enacted, licensed providers could no longer safeguard or move affected tokens, potentially impacting existing holders as well as buyers. The proposal is a policy submission, not law; it sets no implementation date or exit process. Any amendment would need to address how providers return assets while complying with existing custody rules, which generally require returning the same type of asset held. The proposal does not ban personal ownership or mandate conversion. Research cited in the piece found USDC gained roughly six percentage points in trading share relative to USDT on regulated-facing exchanges around April 2025, mainly as USDT trading declined; broader exchange ratios remained nearly flat. The Commission’s eventual legislative proposal and its treatment of existing balances will determine the impact.
