Starting June 30, 2024, the European Economic Area (EEA) will enforce new regulations under the Markets in Crypto-Assets (MiCA) framework, specifically targeting stablecoins. Binance, one of the world's largest cryptocurrency exchanges, plans to roll out changes to ensure compliance, impacting everything from trading to rewards.
Only regulated companies can issue and offer stablecoins, termed regulated stablecoins. Many existing stablecoins do not meet these criteria and will be designated as unauthorized stablecoins, facing various restrictions on Binance's platform, the cryptocurrency exchange said in a statement on its website.
Changes to Binance's Products and Services
From June 30, the unauthorized stablecoins will switch to a "sell-only" mode on Binance. EEA users can sell these stablecoins for other digital assets like Bitcoin, regulated stablecoins, or fiat currencies where available. However, buying unauthorized stablecoins will no longer be an option.
Spot trading pairs with unauthorized stablecoins will temporarily remain active, coexisting with those involving regulated stablecoins. This transition period is meant to minimize market disruption. However, users can still withdraw or deposit unauthorized stablecoins from their Binance wallets.
Under upcoming MiCA rules some stablecoins will face restrictions as unauthorized stablecoins.Binance won't delist any unauthorized stablecoins on spot but will limit their availability for EEA users only on certain products, such as launchpool and earn, and will propose…
— Binance (@binance) June 3, 2024
Beyond these specific impacts on its products, Binance will implement broader restrictions to align with MiCA rules. Rewards will shift from unauthorized stablecoins to regulated stablecoins, BNB, or other tokens. Existing vouchers can be claimed until expiration.
Binance has also made changes to spot copy trading services for the EEA region. This service will end by June 29, 2024. The exchange has urged users to close positions and transfer funds back to spot wallets before this date to avoid automatic closures.
Payments and Transactions
New 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 restrict unauthorized stablecointransactions. Users can no longer send, receive, or utilize these stablecoins for payments. Where necessary, refunds will be processed in EUR.
Platforms like P2P trading, Binance OTC, Web 3 Wallet's Earn section, and NFT purchases will also enforce restrictions on unauthorized stablecoins. Through these new changes, Binance aims to align its services with MiCA's regulatory landscape, fostering a compliant and stable cryptocurrency market in the EEA.
This article was written by Jared Kirui at www.financemagnates.com.
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