Binance, the world’s largest cryptocurrency exchange by trading volume, announced it will soon restrict availability in the European Union to stablecoins that are considered “unregulated” by the EU.

In a statement, Binance said the rules for stablecoins outlined in the EU’s Markets in Crypto-Assets Regulation (MiCA) will come into effect at the end of June. “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,” the statement said.

Binance said that as stablecoins become regulated in Europe, only tokens issued by “regulated companies” will be available to the public. “Several existing stablecoins may not fall into this category and will therefore be subject to certain restrictions,” the company also said.

When asked to detail which stablecoins fall into the “unauthorized” category, Binance pointed to a blog post that further explains the exchange’s position. “Currently there are few regulated stablecoins with limited liquidity that may not be sufficient to support sudden demand across the industry,” it said. “Over the coming months, we expect to see more regulated stablecoins available in the market, which will allow for the market to fully switch to regulated stablecoins over time, ensuring that the objectives of MiCA are fulfilled.”

Binance also outlined in its statement a “phased” approach designed to adhere to the changes to stablecoin regulation in Europe. Primarily, the exchange will allow users to convert holdings in “unauthorized” stablecoins for other digital assets like bitcoin and ether, regulated stablecoins, or fiat currency, according Binance’s statement.

Buying “unauthorized” stablecoins in Europe will no longer be possible from June 30, the exchange said.

Since former Binance CEO Changpeng Zhao was sentenced to four months in prison back in April, the company’s new leader, Richard Teng, has made efforts to appear the company wants to increase collaboration with regulators.

 

Source : The Block 

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