Key Takeaways
- From June 30, unauthorized stablecoins will switch to a “sell-only” mode on Binance.
- “Convert functions for Unauthorized Stablecoins will be available in a ‘sell-only’ mode.”
- Binance is dividing stablecoins into “regulated” and unauthorized” coins to comply with the new rules.
Leading crypto exchange Binance is making significant changes to its platform in a bid to comply with the Markets in Crypto-Assets (MiCA) framework.
The deadline for complying with the MiCA provisions is Dec. 30, 2024, although clauses related to stablecoins, take effect on June 30, 2024. As per the new regulations, stablecoin issuers will need to be registered as an Electronic Money Institution (EMI) within the European Economic Area (EEA).
Under MiCA, stablecoin issuers must obtain prior authorization before publicly offering or listing these assets in the EU, and only the issuer is allowed to perform these actions unless they grant written consent to another party.
To comply with MiCA, Binance is dividing stablecoins into “regulated” and unauthorized” coins.
“Our aim is to fulfill MiCA objectives smoothly by transitioning users from Unauthorized Stablecoins to Regulated Stablecoins over time, as more Regulated Stablecoins become available in the market,” Binance stated.
The exchange has however not revealed which stablecoins will be deemed compliant, acknowledging that only a few meet MiCA requirements at present. To navigate this uncertainty, Binance will primarily rely on a “sell-only” strategy, particularly impacting the Binance Convert function. “Convert functions for Unauthorized Stablecoins will be available in a ‘sell-only’ mode,” the exchange confirmed.
Phased changes will begin on June 30th, with unauthorized stablecoins switching to a “sell-only” mode on Binance. EEA users can then sell these stablecoins for other digital assets like Bitcoin, regulated stablecoins, or fiat currencies where available. Buying “unauthorized” stablecoins in Europe will no longer be possible from June 30th onwards.
The exchange stated that borrowings and collateral involving unauthorized stablecoins will be blocked. However, existing loans and holdings in margin wallets will remain unaffected for the time being.
Binance Pay will also restrict unauthorized stablecoin transactions. Users can no longer send, receive, or utilize these stablecoins for payments. Where necessary, refunds will be processed in EUR. The exchange stated that users can still withdraw or deposit unauthorized stablecoins from their Binance wallets during this transition period.
The exchange will allow users to convert holdings in “unauthorized” stablecoins for other digital assets like Bitcoin and Ethereum, regulated stablecoins, or fiat currency.
As part of its effort to comply with MiCa, the exchange is also shifting its reward programs from unauthorized stablecoins to regulated stablecoins, BNB, or other tokens. Existing vouchers can still be claimed until they expire.
Spot copy trading services for the EEA region will also be discontinued entirely by June 29th. The exchange has urged users to close positions and transfer funds back to spot wallets before this date to avoid automatic closures.
“Binance Spot Copy Trading will be discontinued for EEA users by June 29, 2024 (UTC+8). We encourage users to close or adjust their existing copied positions and transfer any funds back to their Spot Wallets by the deadline,” the exchange announced.
Binance is however not the only exchange to implement changes to comply with MiCA regulations. Earlier this year, crypto exchange OKX decided to remove USDT pairs in Europe.
