ESMA proposes ending EU custody and transfer services for non-compliant stablecoins

What happened

The European Securities and Markets Authority proposed ending EU custody and transfer services for non-compliant stablecoins, which are digital tokens pegged to stable assets. Licensed custody and transfer access could be lost if the proposal becomes law, and exit rules remain unresolved.

Proposed

Global impact / market context

Investors holding non-compliant stablecoins in EU-regulated custody could face restricted access, forcing sales or transfers to compliant alternatives. This may reshape stablecoin demand and investor positioning across the EU, while unresolved exit rules leave timing and process uncertainty for affected holders.

Analyst inference

Stablecoins like USDT and USDC are widely used for trading and payments, so cutting custody and transfer access could reduce their EU usage. Compliant tokens may gain share if investors shift holdings, though unresolved exit rules keep the final market impact uncertain for now.

Analyst inference

What to watch

1. Watch whether the proposal becomes law, since the article says non-compliant tokens could lose licensed custody and transfer access only if the proposal becomes law. Confirmed
2. Monitor how EU regulators resolve the still-unresolved exit rules, which would determine how holders can move out of non-compliant stablecoins if the proposal is approved. Proposed
3. Track whether investors shift holdings from non-compliant stablecoins such as USDT toward compliant alternatives like USDC, which could change stablecoin demand and trading usage in the EU. Analyst inference

Affected assets

• USDT — Tether
• USDC — USD Coin

Evidence

• cryptoslate.com