Binance prepares for the implementation of MiCA regulation and updates the rules for stablecoins: changes coming for European users.
On June 3rd, Binance announced that it will introduce changes to its services within the countries of the European Economic Area (EEA) in preparation for the Markets in Crypto-Assets Regulation (MiCA). MiCA, which will come into effect on June 30th for asset-referenced tokens and e-money tokens, is a European regulatory framework aimed at providing a legal definition for crypto-assets and establishing a consistent and transparent regulatory framework within the European Union (EU).
According to MiCA requirements, funds received in exchange for a stablecoin must be protected in accordance with specific prudential supervision requirements, and at least 30% of those funds must be deposited in separate accounts for small stablecoins in terms of market cap (60% for large-capitalisation stablecoins). The remaining portion can be invested in low-risk and highly liquid instruments. A redemption right for clients is also provided, which can be exercised at any time, with the issuer being obliged to liquidate the corresponding currency value.
Gradual transition
In view of MiCA’s implementation, Binance will categorize stablecoins into “regulated” and “unregulated” groups based on their compliance with the new regulations. The exchange aims for a gradual transition, moving users from unregulated stablecoins to regulated ones as they become available.
Through the Binance Convert function, the exchange will only allow the sale of unregulated stablecoins into other digital assets or regulated stablecoins. It will still be possible to deposit or withdraw unregulated stablecoins to/from the Binance wallet.
Binance is not the first exchange to respond proactively in anticipation of MiCA. Last March, the OKX exchange delisted Tether in Europe without citing reasons related to MiCA.
At the moment, Binance has not communicated which stablecoins fall into the “unregulated” category and will be subject to usage limits for European clients.
