Binance, one of the world’s leading cryptocurrency exchanges, has recently announced significant changes to its stablecoin regulations in Europe.
Starting from the end of June, Binance will begin restricting access to “unauthorized” stablecoins in compliance with the new MiCA stablecoin rules across the European Economic Area (EEA).
Binance Adapts To New Stablecoin Regulations
Under the new regulations, only regulated companies will be permitted to issue and offer stablecoins to the public, which will be classified as “Regulated Stablecoins.”
As a result, several existing stablecoins may not meet the requirements to be categorized as such. They will consequently be subject to certain restrictions, earning them the “Unauthorized Stablecoins.”
To ensure a clear transition for its users and comply with the MiCA stablecoin rules, Binance will implement phased changes to the availability of Unauthorized Stablecoins, as announced on Monday. These changes will affect various aspects of Binance’s product offerings.
Starting from June 30, the exchange will restrict the availability of the labeled Unauthorized Stablecoins for EEA users across its entire range of products and services. This includes Binance Convert, Spot Trading, Wallet, and more.
Users cannot engage in new products or services involving Unauthorized Stablecoins. Binance aims to prevent market disruptions and ensure compliance with the MiCA stablecoin rules.
Impacts will also be felt in various areas of Binance’s ecosystem. Rewards, such as those obtained from the Rewards Center, Campaigns, and Referrals, will be altered to be distributed in Regulated Stablecoins, BNB, or other non-stablecoin tokens.
More Changes Ahead
Spot Copy Trading will cease to be available for EEA users on June 29. Individuals using this service are advised to close their positions and transfer their funds to their respective Spot Wallets before the specified date and time.
Margin trading will also be affected, as new borrowings and transfers of Unauthorized Stablecoins as collateral into users’ Margin Wallets will be blocked. Existing Margin loans, however, will remain unaffected and will not be subject to forced liquidation until further notice.
Margin traders impacted by these changes are encouraged to close margin loans involving Unauthorized Stablecoins. Existing holdings of Unauthorized Stablecoins in Margin Wallets may still be utilized for trading until further notice.
Binance’s Launchpad, Launchpool, Simple Earn, Loans & VIP Loans, Auto-Invest, Dual Investment, Cloud Mining, Binance Pay, Send Cash, Red Packet, NFT purchases, Spend To Earn, Gift Cards, Web3 Wallet – Earn Section, P2P, and OTC trades will also experience specific restrictions or changes related to Unauthorized Stablecoins.
As of press time, the exchange’s native token, BNB, is currently trading at $623, following the broader market’s recovery with a 4.5% gain in the past 24 hours, inching closer to its yearly high of $642 reached in mid-March.
Featured image from Unsplash, chart from TradingView.com