On September 21, a Binance spokeswoman announced the delisting of all stablecoins from the exchange in Europe due to compliance with MiCA law by June 30, 2024. Later, the exchange’s CEO, Changpeng Zhao, clarified this wording. Let's learn why Binance wants to delist stablecoins and what comes next.
What is MiCA
MiCA (Market in Crypto Assets) is the name of the forthcoming European Union regulation aimed at governing crypto assets. The document, under discussion by regulators for several years, seeks to clarify basic terms such as NFT, DeFi, stablecoins, and more. It also provides clarity about the activities of cryptocurrency companies, specifying the licences they must obtain and outlining their associated rights and restrictions.
These rules are expected to remove grey areas within crypto regulation in the EU. MiCA is scheduled to come into force on June 30, 2024. For further insights into the details of these regulations, you can find additional info in the Cryptonomist's review, and also read the full text of the document.
Why Binance to delist stablecoins
On September 21, Marina Parthuisot, Head of Legal at Binance France, revealed in an interview with CoinDesk thatBinance plans to remove all stablecoins for its European clients. On the same day, a blog post on the exchange's website reported that Binance is in discussions with European Union regulators regarding the MiCA rules.
Under the forthcoming law, exchanges will be required to remove all stablecoins that have not obtained Electronic Money Institution (EMI) licenses. However, how this should be put into practice remains unknown. There are still nine months ahead until the laws take effect. Additionally, the status of decentralised stablecoins is unclear since they operate on smart contracts and usually do not have a "physical" issuer that can be licensed.
☝️ Official information has not been provided yet regarding whether stablecoins can still be stored in a Binance account. However, delisting usually involves the removal of linked trading pairs, termination of deposits for affected coins, and the establishment of a deadline for withdrawals.
Binance’s reaction on new MiCA rules
This breaking development sparked a significant reaction on social media. Binance CEO Changpeng Zhao tweeted that the exchange was in talks with partners to launch euro-backed stablecoins and collaborate with stablecoin issuers that comply with the upcoming legislation.
In a blog post, Binance expressed support for the MiCA rules, stating, "The broad intent of MiCA is overwhelmingly positive for the crypto industry. As always, there are critical technical details that must be worked through".
Marina Parthuisot also noted, "This could have a significant impact on the market in Europe compared to the rest of the world".
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