The European Securities and Markets Authority has asked the European Commission to prohibit every licensable crypto-asset service involving stablecoins that fail the EU's Markets in Crypto-Assets regulation (MiCA), including custody and transfers, in its September 30, 2026 response to a review of the regulation. If adopted as proposed, the change would remove the option of leaving such tokens with a licensed custodian after their trading pairs disappear, reaching existing holders who have stopped trading as well as customers seeking to buy, according to the submission.
ESMA asks European Commission to extend stablecoin restrictions to custody, transfers
The European Securities and Markets Authority has asked the European Commission to prohibit every licensable crypto-asset service involving stablecoins that fail the EU's Markets in Crypto-Assets regulation (MiCA), including custody and transfers, in its September 30, 2026 response to a review of the regulation. If adopted as proposed, the change would remove the option of leaving such tokens with a licensed custodian after their trading pairs disappear, reaching existing holders who have stopped trading as well as customers seeking to buy, according to the submission.
The September 2026 response is a further step from the regulator's January 2025 approach, which said mere custody and transfer should remain possible. In a statement dated January 17, 2025, ESMA distinguished services that offered non-compliant stablecoins to the public or admitted them to trading from simply holding or transferring them. Platforms were expected to stop making the tokens available for trading, and other services had to cease where they constituted an offer to the public. Under that earlier transition, acquisition restrictions were expected by the end of January 2025, with temporary sell-only services through the end of the quarter. ESMA acknowledged that investors retaining those holdings could face worse execution conditions, even while custody and transfer remained possible.
In reporting dated March 3, 2025, CryptoSlate said Binance planned to remove nine tokens' trading pairs for European Economic Area users by March 31 while keeping deposits, withdrawals, conversions and custody available. The source describes this as the exchange's announced approach in March 2025.
The reach of the proposal comes from MiCA's Article 3 definitions. Custody includes safekeeping or controlling clients' crypto-assets or their means of access, including private keys. Transfers cover moving assets on a client's behalf from one ledger address or account to another. Both are expressly listed services, with Article 82 setting client-agreement requirements for transfers. Article 59 requires authorization as a crypto-asset service provider, or qualifying permissions for specified financial entities, and says authorizations must identify the services permitted. A license for a provider does not by itself settle whether a particular stablecoin can be serviced.
ESMA's response is a policy submission, not an enacted amendment. The Commission's consultation had a September 30 deadline, and its page says the resulting review report may, if warranted, be accompanied by a legislative proposal. Section 3.2 of ESMA's submission gives no implementation date, withdrawal exception or wind-down mechanism.
Existing custody rules provide a starting point. Article 75 requires procedures to return clients' crypto-assets or their means of access as soon as possible, and client assets must be segregated from the provider's own holdings. An answer from the European Commission via ESMA, dated February 18, 2026, further says the assets returned must be the same type held when the client requests withdrawal. A provider may offer conversion into fiat or another crypto-asset, but the client must request it at withdrawal and the provider must have permission for the additional service. That existing interpretation does not settle how a future blanket service restriction would handle exits.
In a July 2026 paper, Nicola Borri and Kirill Shakhnov examine trading in the dollar-linked tokens USDT and USDC across 14 exchanges selected from CoinMarketCap's top 30 centralized venues. Their daily pair-volume data from CryptoCompare run from January 1, 2024, through December 7, 2025. The authors classify Bitstamp, Coinbase, Gemini and Kraken as "regulated-facing" because their Similarweb EU audience shares exceed 10%; all four also have US audience shares above 10%. The other 10 venues are classified as globally oriented, including Binance despite its EEA delistings. Around the study's April 1, 2025 event date, the authors estimate that USDC's share of combined USDT and USDC trading rose by about six percentage points on regulated-facing exchanges relative to global exchanges. The estimate covers a 30-day window and uses smoothed, detrended data. The authors estimate USDT trading volume fell about 20% on regulated-facing exchanges relative to global venues, while the USDC-volume estimate was not statistically significant. Aggregate USDC-to-USDT trading-volume ratios across the sample stayed nearly flat around the event.
- The source does not state whether the European Commission will adopt ESMA's proposal or when a legislative amendment might take effect.
- The source does not state a total for the holdings that a future custody restriction could affect.
- The source does not state how an end to custody would be reconciled with the Article 75 obligation to return clients' crypto-assets.
- The source does not state how the study's venue classification relates to individual EU-resident trades or to legal exposure.
- The source does not state whether the European Commission's February 18, 2026 answer on returned assets would be revised if a blanket service restriction were adopted.
Read the original at CryptoSlate