ESMA asks EU to bar custody and transfers of non-MiCA-compliant stablecoins
In brief
- ESMA wants Europe's non-compliant stablecoin restrictions extended from trading to custody and transfers.
- ESMA's January 2025 approach had said mere custody and transfer should remain possible.
- Existing holders, not only new buyers, would be affected by the change, CryptoSlate said.
- Section 3.2 sets no implementation date, withdrawal exception or wind-down mechanism, CryptoSlate noted.
- The submission is policy, not law; the Commission may or may not propose legislation.
From trading limits to custody
ESMA's earlier line was narrower. Its January 17, 2025 statement separated offering non-compliant stablecoins to the public, or admitting 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 amounted to an offer to the public. Acquisition restrictions were expected by the end of January 2025, with temporary sell-only services running through the end of that quarter.
Mere custody and transfer were supposed to stay possible. (ESMA did acknowledge that investors who kept those holdings could face worse execution conditions.) Exchanges worked within that model. In March 2025, CryptoSlate reported that Binance planned to remove nine tokens' trading pairs for EEA users by March 31 while keeping deposits, withdrawals, conversions and custody available.
The new submission drops that carve-out.
According to CryptoSlate's analysis, the change would reach existing holders who've stopped trading as well as customers looking to buy. ESMA argued that without a clear prohibition, compliant and non-compliant issuers aren't on equal footing, and regulatory arbitrage gets easier.
What MiCA counts as custody and transfer
Under MiCA's Article 3 definitions, custody includes safekeeping or controlling clients' crypto-assets or their means of access (private keys included). Transfers cover moving assets on a client's behalf from one ledger address or account to another. Both are expressly listed services. Article 82 sets client-agreement requirements for transfers, and Article 59 requires CASP authorization (or qualifying permissions for specified financial entities) that identifies the services a firm is permitted to offer.
Not law yet
It's a policy submission, not an enacted amendment. The Commission's consultation had a September 30 deadline, and the review report that follows may, if warranted, be accompanied by a legislative proposal. It may or may not be.
Exit rules are still open. CryptoSlate noted that Section 3.2 of ESMA's submission gives no implementation date, no withdrawal exception and no wind-down mechanism for people already holding these tokens. The outlet's analysis said the proposal could give compliant tokens a wider advantage in European distribution, but it didn't imply a forced conversion timetable or a global shift in demand.
Frequently asked questions
What did ESMA propose for non-compliant stablecoins?
In its September 30, 2026 response to the EU's MiCA review, ESMA asked the European Commission to prohibit every licensable crypto-asset service involving stablecoins that fail MiCA's applicable requirements. Custody and transfers are on that list, which would extend restrictions beyond trading.
How is this different from ESMA's January 2025 approach?
ESMA's January 17, 2025 statement separated offering or listing non-compliant stablecoins from simply holding or transferring them, and said mere custody and transfer should remain possible. The new proposal goes further by covering those services too.
Is ESMA's stablecoin proposal now law?
No. ESMA's response is a policy submission, not an enacted amendment. The Commission's consultation had a September 30 deadline, and the resulting review report may, if warranted, be accompanied by a legislative proposal.
What happens to existing holders under the proposal?
CryptoSlate said the proposal would reach existing holders who have stopped trading, not only new buyers. CryptoSlate also noted that Section 3.2 of ESMA's submission gives no implementation date, withdrawal exception or wind-down mechanism.
