WEB3
by BSCN
June 3, 2024
Binance will implement a phased approach to manage these changes, ensuring a smooth transition to Regulated Stablecoins without market disruption.
Binance announced it will restrict the availability of certain stablecoins in the European Union. This move aligns with the EU’s new Markets in Crypto-Assets Regulation (MiCA), which mandates that only stablecoins issued by regulated entities can be offered to the public.
"This will be a first step entering the new regulatory framework and it will have a significant impact on the stablecoin market in the European Economic Area," Binance said in a statement.
The MiCA regulations aim to provide clearer oversight and consumer protection in the cryptocurrency market. Under MiCA, stablecoins are categorized as “Regulated Stablecoins” if issued by regulated entities.
Stablecoins that do not meet these criteria will be labeled “Unauthorized Stablecoins” and face various restrictions.
"Several existing stablecoins may not fall into this category and will therefore be subject to certain restrictions," the company added.
It is still unclear which stablecoins qualify as "unauthorized."
Starting June 30, 2024, Binance will begin a phased approach to manage the availability of Unauthorized Stablecoins for users in the European Economic Area (EEA). This approach is designed to ensure a smooth transition to Regulated Stablecoins without disrupting the market.
Binance will enforce specific measures across its product offerings:
Spot Trading:
Until further notice, Unauthorized Stablecoins will remain available for trading.
There will be simultaneous trading pairs with Unauthorized and Regulated Stablecoins during the transition period.
Binance Convert:
Unauthorized Stablecoins will now be converted in a "sell-only" mode. Depending on the jurisdiction, these stablecoins can be sold for other digital assets, Regulated Stablecoins, or fiat currencies.
Unauthorized Stablecoins can’t be purchased via the Convert function.
Wallet Services:
Users can deposit and withdraw Unauthorized Stablecoins from Binance wallets as usual.
Furthermore, from June 30, 2024, users will not be able to engage in unauthorized stablecoin-related products or services.
Market observers suggest that the implementation of MiCA rules could drive significant changes in the stablecoin ecosystem. This may lead to increased adoption of Regulated Stablecoins and a more stringent regulatory environment for digital asset issuers. Binance’s phased approach aims to mitigate market disruption while adhering to the new regulations.
The changes are part of Binance’s effort to align with the new MiCA framework, which seeks to protect consumers and ensure financial stability in the cryptocurrency market.
Disclaimer
Disclaimer: The views expressed in this article do not necessarily represent the views of BSCNews. The information provided in this article is for educational and informational purposes only and should not be construed as investment advice. BSCNews assumes no responsibility for any investment decisions made based on the information provided in this article
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