ESMA's Opinion on Non-MiCA Compliant Stablecoins

Video transcript

ESMA's October 2026 opinion says EU CASPs should not provide any service for stablecoins that are not MiCA compliant. That now includes custody and transfers.

In January 2025, CASPs could stop trading, offer a sell-only window, and keep custody running. The new opinion presumes every MiCA service touching a non-compliant token breaches the duty to act in clients' best interests.

The opinion names no token. But no Tether entity appears in ESMA's register of e-money token issuers, so that register gives no basis to treat USDT as compliant.

Warnings will not fix it. ESMA says disclosures and client acknowledgements do not address the missing issuer safeguards.

NCAs should require legacy exposures remediated within three months, by 8 January 2027. After that, only time-limited sell-only, conversion, transfer or withdrawal functions should remain.

Then the engineering. Restrict tokens in the listing registry, close trading pairs, even where the token is the quote currency, disable deposits on every chain, keep withdrawals open, and pull it from earn products and portfolio models.

Supervisors will want proof. Record a decision per token and contract address, export your configuration, run negative tests through the app and API, and monitor EU client balances for any increase.

Guardian's assessments and API pentests check that limits hold behind the interface. Read the full article, or talk to Guardian at guardian.security.

In January 2025 the EU's message on non-MiCA compliant stablecoins was narrow: stop trading them, give clients a sell-only window, and keep custody and transfers running.

ESMA's 17 January 2025 statement said "mere custody and transfer of these crypto-assets should remain possible."

Its opinion of 8 October 2026, addressed primarily to national competent authorities (NCAs), removes that carve-out.

It presumes every MiCA service touching a non-compliant e-money token (EMT) or asset-referenced token (ART) incompatible with a CASP's duty to act in its clients' best interests.

For an exchange, broker, custodian or portfolio manager, that is an engineering project as much as a compliance one.

This article explains the technical and security side of ESMA's opinion on non-MiCA-compliant ARTs and EMTs (ESMA75-113276571-1742). It is not legal advice; confirm how it applies to you with counsel.

Which Tokens It Catches

Footnote 1 calls a token non-compliant when the MiCA conditions for a lawful EU offer or admission to trading, including any exemptions or transitional arrangements, are not met.

Under MiCA Article 3(1), an EMT "purports to maintain a stable value by referencing the value of one official currency", so a dollar or euro stablecoin is an EMT.

Article 48(1) lets only its issuer, or another person with that issuer's written consent, offer it to the public or seek its admission to trading.

The issuer must be authorized as a credit institution or electronic money institution and have notified and published a white paper. Article 16(1) sets the equivalent rule for ARTs.

The practical first check is ESMA's interim MiCA register, which publishes a file of EMT issuers and their white papers and is updated weekly.

The version we checked, last updated 30 October 2026, lists Circle Internet Financial Europe SAS with white papers for USDC and EURC, among others.

No Tether entity appears in it, so the register gives a CASP no basis to treat USDT as MiCA compliant.

The register is a starting point, not a legal ruling. ESMA notes the white papers in it have not been reviewed or approved by any competent authority.

Wrapped, bridged and omnichain versions raise their own classification question, so record a decision for each contract address on each chain. Where in doubt, ESMA's 2025 statement told CASPs to contact their NCA.

Every Service Is in Scope

The core sentence is paragraph 12: "CASPs should not provide crypto-asset services in relation to ARTs or EMTs that are not compliant with the applicable requirements under MiCA."

The reason is the "absence of the issuer-level safeguards required by MiCA", which the CASP cannot identify, manage or mitigate (paragraph 13).

That gives rise to "the presumption that the provision of all MiCA services is incompatible with the obligations set out in Article 66(1)".

Paragraph 21 lists every MiCA service: operating a trading platform, exchange, execution, reception and transmission of orders, placing, advice, transfer services, custody and portfolio management.

Paragraph 22 says CASPs "should not maintain, introduce or facilitate access" to these tokens for EU clients. The word maintain is what reaches custodians.

They should implement "appropriate technical, contractual and organisational controls", including "controls preventing EU clients from acquiring or increasing positions."

Warnings will not fix it. In paragraph 19, ESMA "considers that reliance on warnings, disclosures or client acknowledgements would not sufficiently address the concerns identified in this Opinion."

For product teams, a click-through risk acknowledgement or a new terms clause does not keep a token available.

The Three-Month Window

Paragraph 27 sets the deadline: NCAs "should require remediation as soon as possible and no later than three (3) months following the date of publication of this Opinion."

ESMA published it on 8 October 2026, which puts the outer date at 8 January 2027.

Any continuing service "should be strictly limited to sell-only, conversion, transfer or withdrawal functionalities necessary to avoid client detriment, and should be time-limited, risk-based and closely supervised."

Under paragraphs 23 and 24, NCAs may allow strictly limited residual services for an orderly wind-down: liquidation, conversion, withdrawal, transfer or safekeeping of existing holdings.

Those services should not facilitate new acquisitions, promotion, trading, active distribution or continued market availability.

Safekeeping appears in the wind-down list, not the paragraph 27 list, so agree an end date for residual custody with your NCA.

Systems That Must Change

Inside a CASP, the services the opinion lists are configuration in a handful of systems. Each needs a change, a test and a record.

Three details catch teams out.

• Quote pairs. Selling bitcoin for USDT is an acquisition of USDT, so the pair cannot stay open.
• Other chains. A deposit address left open on one network keeps the position growing. See verifying multichain stablecoin deployments.
• The API. Controls enforced in the app but not in the API or matching engine do not hold.

Evidence for Your NCA

Paragraph 25 asks NCAs to assess whether any authorized CASP still provides these services. Paragraph 26 asks them to ensure CASPs "implement appropriate controls."

Expect a supervisor to ask to see the controls working, not a policy saying they exist.

1. A token decision record: classification, register check and date, each contract address and chain, and the approver.
2. Configuration exports, timestamped, for listing status, pairs, deposit addresses and product eligibility.
3. Negative tests: buys through the app, API, OTC and convert, deposits on each chain and internal transfers, each rejected and logged by an independent tester.
4. Exposure monitoring: a daily report of EU client balances per restricted token, with an alert on any increase.
5. Change control that stops silent relisting or re-enabled deposit addresses.

For the other stablecoin regulations, see our stablecoin regulation guide. For the US mirror image, see Is USDT GENIUS Act Compliant?

How Guardian Helps

Guardian's Regulatory & Compliance assessments start with applicability: your activities, entities and customer locations mapped to the regulations that reach them, confirmed with your counsel.

Guardian's web application and API pentests test the failure that matters most here: limits enforced in the interface but not behind it.

Frequently Asked Questions

Does ESMA's opinion ban USDT in the EU?

It names no token. No Tether entity appears in ESMA's register of EMT issuers. CASPs treating USDT as non-compliant should stop EU client services by 8 January 2027, apart from time-limited residual ones.

What is the deadline for non-MiCA compliant stablecoins?

NCAs should require remediation of legacy exposures no later than three months after publication on 8 October 2026, so by 8 January 2027. After that, only time-limited sell-only, conversion, transfer or withdrawal functions should remain.

Is the ESMA opinion legally binding on CASPs?

It is an Article 29(1)(a) opinion addressed primarily to NCAs, and it does not amend MiCA. But ESMA expects NCAs to assess every authorized CASP against it, and says it will monitor application.

Sources

• ESMA: Opinion on the provision of crypto asset services in relation to non-MiCA-compliant ARTs and EMTs, ESMA75-113276571-1742 (8 October 2026)
• ESMA: ESMA sets out supervisory expectations on services related to unauthorised stablecoins (8 October 2026)
• ESMA: Public Statement on the provision of certain crypto-asset services in relation to non-MiCA compliant ARTs and EMTs, ESMA75-223375936-6099 (17 January 2025)
• ESMA: Q&A 2404, Scope of public offering (17 January 2025)
• ESMA: ESMA and the European Commission publish guidance on non-MiCA compliant ARTs and EMTs (17 January 2025)
• EUR-Lex: Regulation (EU) 2023/1114 on markets in crypto-assets (MiCA), OJ L 150 (9 June 2023)
• ESMA: Markets in Crypto-Assets Regulation and the interim MiCA register (register last updated 30 October 2026)
• Guardian: Regulatory & Compliance Assessments