Binance prepares for MiCA regulations, improves stable coin strategy
By the end of the month, Binance will be toeing the line as markets settle on the Crypto-Assets Regulation (MiCA) rules for stablecoins (asset-referenced tokens). A cryptocurrency exchange has warned of changes that users in the European Economic Area can expect in their services.
The MCA will create uniform rules for crypto asset issuers that were previously unregulated in the EU. In response, Binance is dividing stablecoins into “regulated” and “unregulated” coins in line with the new regulations.
Binance transfers users gradually
The exchange aims to fulfill MiCA's objectives by moving users from unlicensed Stablecoins to regulated Stablecoins from time to time, as more regulated Stablecoins are available on the market.
Related: EU publishes draft rules for stablecoin issuer complaint procedures
No decisions have yet been made on which stablecoins will or will not comply with MiCA. Currently, only a few statscoins meet the MiCA requirements, Binance said.
Binance mainly relies on a “sell-only” strategy to comply with MICA requirements. The strategy applies specifically to the Binance Convert function: “Unauthorized Stablecoins Convert function is available in ‘sale-only' mode.”
Binance claims to have 196.6 million users worldwide. He wrote in a blog post.
“Our transition mechanism is designed to minimize the potential adverse effects on the EEA and the global crypto market as users rush to exchange their stablecoin assets when exits are limited.”
MiCA can be good for crypto and stablecoins.
The MCA was enacted into law in May 2023. Binance may not be the first exchange to take action before implementation. In March, OKX canceled Tether in Europe, not to mention MiCA. In September, Binance denied reports based on a quote that it intended to list all stablecoins in Europe in an interview with Binance France Legal Head Marina Partuisot.
Expert opinions are divided on the impact of MiCA on the European crypto market, but many spoke positively about the law, with concerns only centered around stablecoins. But as European Commission economist Joachim Schwerin told Cointelegraph, “MiCA could help us be more open to a stable coin in general.”
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