The European Securities and Markets Authority (ESMA) today clarified its supervisory expectations of crypto-asset services involving asset-referenced tokens (ARTs) and e-money tokens (EMTs) – also known as stablecoins- that do not comply with the requirements of the Markets in Crypto-Assets Regulation (MiCA).

Crypto-asset service providers (CASPs) authorised under MiCA must cease providing services related to non-MiCA-compliant stablecoins to clients in the European Union.

This applies to the full range of crypto-asset services covered by MiCA, including the operation of trading platforms, exchange services, execution of orders, placing of crypto-assets, reception and transmission of orders, investment advice, transfers, custody and administration, and portfolio management, whether these services are provided individually or in combination.

ESMA’s opinion calls on National Competent Authorities (NCAs) to supervise that market participants neither maintain, introduce, nor facilitate access for clients to non-MiCA-compliant stablecoins through their services. NCAs must also ensure that CASPs implement appropriate technical, contractual, and organisational controls to prevent the availability of such tokens in the European Union, including controls preventing clients from acquiring or increasing exposures to those tokens.

When NCAs identify remaining pre-existing exposures, they have to require their remediation as soon as possible and no later than three months after the publication of the opinion.

Any continuation of services must be strictly limited to activities necessary for the liquidation, conversion, withdrawal, transfer or safekeeping of such assets, and must remain time-limited, risk-based, and closely supervised.