On 8 October 2026 the European Securities and Markets Authority (ESMA) published an opinion on crypto-asset services involving stablecoins whose issuers do not comply with the Markets in Crypto-Assets Regulation (MiCA). Under it, crypto-asset service providers (CASPs) authorised under MiCA should stop providing services in relation to such asset-referenced tokens (ARTs) and e-money tokens (EMTs). The opinion names all nine services it lists, from operating a trading platform to custody. Where legacy holdings remain, national supervisors should require them to be cleared no later than three months after publication. As time-limited residual services, supervisors may allow the sale, conversion, withdrawal, transfer and safekeeping of existing positions to support the wind-down.
Much of the trade press has read this as the end of USDT on European platforms, with 8 January 2027 as the cut-off. ESMA closed the trading venues in 2025, though: by the end of March 2025 the large regulated platforms in the EU had, by their own accounts, taken Tether’s dollar token out of their order books, at the request of the same authority. What has changed is the reach. ESMA now covers custody and transfer, which in January 2025 it had expressly described as remaining possible, and it no longer relies on the ban on offering an unauthorised token to the public. It relies instead on the general conduct duty in Article 66(1) MiCA. That provision already applied in January 2025, so the law has not moved. The supervisory expectation has. From the conduct duty ESMA derives a presumption that each of the nine services is incompatible with Article 66(1), and it frames that presumption so that it is in practice irrebuttable. No explicit ban exists in the regulation. On 30 September ESMA itself asked the European Commission to write one in – to remove, in its own words, interpretative ambiguity.
What: Opinion ESMA75-113276571-1742, dated 8 October 2026, on crypto-asset services relating to non-MiCA-compliant ARTs and EMTs, five pages, 28 paragraphs
Who: ESMA, addressed primarily to national competent authorities and, through them, to every CASP authorised under MiCA
Scope: all nine services listed in paragraph 21, individually or in combination, for tokens that do not meet the conditions of Title III or IV MiCA, including exemptions and transitional arrangements
Deadline: legacy holdings to be remediated no later than three months after publication, which works out at 8 January 2027, although ESMA gives no date
Legal nature: an opinion under Article 29(1)(a) of the ESMA Regulation, not a guideline with a comply-or-explain duty. The lever is Article 66(1) MiCA, which also binds banks providing crypto services under Article 60
Not covered: self-custody by clients and tokens from authorised issuers such as USDC or EURC
ESMA closed the venues in 2025 and called custody possible
The rules for issuers of ARTs and EMTs have applied since 30 June 2024. In early July 2024 the European Banking Authority (EBA) called on all crypto-asset service providers to stop, from that date, any service that amounts to an offer to the public, an admission to trading or a placing of non-compliant tokens. On 17 January 2025 the European Commission followed with answer 2404 in the MiCA Q&A, and ESMA with a public statement that quotes the EBA call verbatim. Under the Commission’s answer, a trading platform that lists a token without an authorised issuer is itself treated as seeking its admission to trading. Exchange, order execution and the reception and transmission of orders, by contrast, were caught only case by case, where they promote the token and so amount to an offer to the public. The deadline was the end of the first quarter of 2025, with a sell-only phase for existing holdings until that date.
For custodians, the decisive line sits in a subordinate clause of the paragraph on client communication. Platforms were to inform clients of the restrictions, “while mere custody and transfer of these crypto-assets should remain possible”, as the January 2025 statement puts it. ESMA cannot grant permission in a legal sense, but it said nothing clearer about custody in 2025. In practice, by their own accounts, Coinbase suspended USDT for EU clients in December 2024 and Binance ended USDT spot trading for EU users on 31 March 2025, while holding remained possible. As our 1 July piece on the MiCA deadline set out, USDT had thus disappeared from the order books of regulated platforms. It stayed in client accounts, held by the same authorised providers.
That gap followed from the legal basis. The 2025 statement rested on Articles 16(1) and 48(1) MiCA, the statutory ban on offering an unauthorised token to the public or seeking its admission to trading. Holding a token a client has already bought is neither. The conduct duty in Article 66(1), on which ESMA now relies, was already in force at the time, because the regulation has applied in full since 30 December 2024. With Article 66(1) already in force, ESMA still treated custody as compatible in January 2025. Providers that have kept holding USDT for clients since then acted in line with the supervisory expectation of the day, and it is precisely those holdings the opinion now targets.
The new lever is the conduct duty, not the offer
In paragraph 7 the opinion states that it does not change the 2025 position and does not turn every service into an offer to the public. Its conclusion, paragraph 14 adds, does not depend on whether a given service amounts to an offer or an admission to trading. ESMA turns instead to Article 66(1) MiCA, under which CASPs must act “honestly, fairly and professionally in accordance with the best interests of their clients”. A provider that offers services in a non-compliant token exposes clients to risks that stem from missing issuer-level safeguards and that it cannot manage on its own. According to paragraph 13, that should “give rise to the presumption that the provision of all MiCA services is incompatible with the obligations set out in Article 66(1)”. A presumption can normally be rebutted. This one is in practice irrebuttable: the risks cannot be mitigated by the provider’s own measures, and paragraph 19 states outright that warnings are not enough.
Paragraph 21 sets out the reach. Supervisors are to check whether services, individually or in combination, allow EU clients to acquire, trade, exchange, increase their exposure to, or maintain non-compliant tokens. The list names all nine services: operating a trading platform, exchange, execution of orders, reception and transmission, placing, advice, transfer, custody and portfolio management. Compared with 2025, four services are added, two that were then described as remaining possible and two that were not mentioned at all. Three more lose the condition that they amount to an offer. Only the trading platform and placing were already caught without that condition in January 2025. The opinion also says in paragraph 7 that it leaves the 2025 position unchanged, and it never reconciles that with paragraph 21.
The firmest line is drawn in paragraph 19. Article 66(3) MiCA requires CASPs to warn clients about the risks of crypto-asset transactions, and letting existing holdings run on under sharper warnings would have been the obvious route. The opinion rules it out: warnings, disclosures or client acknowledgements would not suffice, because they cannot replace the missing issuer-level safeguards and because clients can hardly judge what that absence means. The logic holds: a redemption right and a segregated reserve cannot be created by a disclosure notice, and under paragraphs 15 to 18 authorised issuers would otherwise carry costs their competitors avoid by distributing through the platforms. The reasoning supports the outcome. It does not stand in for the provision that would order it explicitly.
Eight days earlier ESMA asked the legislator for an explicit ban
On 30 September 2026, eight days before the opinion, ESMA published its response to the Commission’s consultation on the review of MiCA. In section 3.2 the authority writes that the current framework creates uncertainty about the extent to which authorised CASPs may continue to facilitate the availability, use or trading of unauthorised stablecoins. It invites the Commission to amend the regulation so that a CASP explicitly cannot provide any licensable service for non-compliant ARTs or EMTs. The amendment should remove interpretative ambiguity and create a “binary supervisory test” that ensures enforceability.
This can be read as mere clarification, and that reading carries weight. ESMA grounds its request in “legal clarity” and complains about the lack of a clear ban, not the lack of any basis at all. An authority that considers a general clause sufficient may still want the legislator to put the result beyond challenge, all the more so as member states, by ESMA’s own account, act inconsistently. Nor is the eight-day gap a piece of staging: the Commission’s consultation ran until 30 September, and ESMA replied on the last day. What the clarification reading does not explain is why custody was tolerated in January 2025, when the same provision was already in force, and is not tolerated now. For custody, transfer, advice and portfolio management there is also no Commission answer like answer 2404, so the opinion rests there on Article 66(1) alone. Its reach therefore depends on supervisory practice rather than on the wording of the regulation.
That dependence is built into the instrument. Article 29(1)(a) of ESMA Regulation 1095/2010 allows the authority to provide opinions to national competent authorities in order to build a common supervisory culture. Unlike guidelines under Article 16(3), there is no duty for national authorities to state within two months whether they comply. Under paragraph 9 the opinion is addressed primarily to them, and in paragraph 28 ESMA says it will monitor timely application together with them. Austria’s Financial Market Authority (FMA) said on 9 October that it would take the expectations into account in its supervision and that remaining positions should be cleared as quickly as possible (“so rasch wie möglich”). No statement of its own from Germany’s Federal Financial Supervisory Authority (BaFin) could be found by 22 October. How it will handle the deadline and the residual services is therefore open. BaFin is the competent authority and an addressee of the opinion.
Custody becomes a wind-down function with an expiry date
What the opinion provides for existing clients is set out in paragraphs 23, 24 and 27. Supervisors may allow CASPs that do not yet meet the expectations to provide strictly limited residual services, where these are needed for an orderly wind-down and to avoid client detriment. The provider has no entitlement to them. Residual services are an option for the supervisor. Under paragraph 24 they are limited to liquidation, conversion, withdrawal, transfer and safekeeping of existing holdings, and must be time-limited, clearly communicated to clients and closely supervised. Paragraph 27 sets the deadline: where supervisors identify legacy exposures, they should require remediation “as soon as possible and no later than three (3) months following the date of publication”. For any continuation it lists only sell-only, conversion, transfer and withdrawal. Safekeeping is missing from that list, although it appears in paragraph 24 and in the press release. The opinion does not define what counts as a legacy exposure.
The 8 January 2027 date doing the rounds in the coverage is a calculation, publication on 8 October plus three months, and ESMA names no date of its own. The deadline is addressed to supervisors rather than directly to providers. Reading paragraph 27 to mean that pure custody also ends after three months is defensible on its wording. Headlines such as the German “Esma will auch die Verwahrung beenden” (ESMA also wants to end custody), which present 8 January as a fixed end date, turn an open point into a certainty. All that is settled is that custody of non-compliant tokens is provided for only as a time-limited residual service, and only where the supervisor allows it. The Hamburg law firm SBS Legal put the practical consequence well on 9 October: no blanket permission to continue the existing offering unchanged until January can be derived from the timeframe.
Anyone who has managed a run-off book on a trading floor will recognise the position these holdings are now in. A position that may no longer grow creates more work, not less: it has to be valued, reconciled, reported and eventually closed out, and each of those steps runs against a deadline. Kraken’s help page from April lists USDT in the European Economic Area for deposits and withdrawals only. According to its help page as of 18 October, Coinbase allows EU clients only to withdraw USDT and a range of other tokens, and automatically converts any balance still in the account on 30 October 2026 into USDC. The page cites the end of the MiCA transitional period on 1 July 2026, not the opinion. For clients, the date that counts is often their provider’s, not the calculated January.
Self-custody is untouched. The opinion governs services by authorised providers, not the ownership of a token, and it lists withdrawal and transfer expressly among the residual services. The route from an account into a client’s own wallet is expressly provided for as a residual service, for as long as the supervisor allows it. Incoming transfers are a different matter: paragraph 21 points the other way, because they would let clients maintain or increase their position with the provider. Coinbase already asks clients explicitly not to send non-compliant tokens, including from external wallets.
Washington bans the sale, London prices the book, the EU covers custody
Across the three large financial centres, the comparison turns on a single question: what may a supervised service provider do for its client with a foreign, unauthorised dollar stablecoin? In the United States, the Guiding and Establishing National Innovation for U.S. Stablecoins Act (GENIUS Act) answers it in statute. Under section 3, three years after enactment it becomes unlawful for a digital asset service provider “to offer or sell” a payment stablecoin to a person in the United States unless it comes from a permitted issuer. The act was signed on 18 July 2025, so the distribution ban applies from 18 July 2028. The 18 January 2027 date described in our 31 July piece on the GENIUS Act is when the act takes effect, not when this ban starts. Foreign issuers remain eligible if the Treasury finds their home regime comparable. On its wording, the ban does not reach custody. In the United Kingdom, the Financial Conduct Authority (FCA) regime starts on 25 October 2027. The published rules contain no ban on dealing in or holding foreign stablecoins for clients. A firm that keeps them in its own trading book, however, must hold capital against them under policy statement PS26/12 like any other crypto-asset, with a 40% position risk requirement.
In trading terms these are three different instruments. Washington sets a hard limit on distribution, with a date. London puts a price on the firm’s own position. The EU covers the entire client service down to custody through a presumption that national supervisors enforce. The American ban comes later and is narrower, but it sits in statute and it is binary. The British capital charge forbids nothing, yet it makes holding non-UK stablecoins on one’s own balance sheet expensive, and that is a number a desk can work with. The European route is the fastest and the broadest of the three: it bites this autumn and reaches into the client’s account. It is also the only one whose explicit statutory basis ESMA itself has only just proposed.
For banks the burden lies in the controls, not the token range
The asset in question is large. According to DefiLlama, about $183bn of USDT was in circulation on 18 October 2026, 59.9% of all dollar-pegged stablecoins. Circle’s USDC stood at $72.6bn, and all euro-denominated stablecoins together at about €836m. ESMA’s register lists not a single authorised ART. The EBA counts 45 notified EMTs and on 14 October classified USDC as the first significant EMT, with joint supervision by the EBA and the French supervisor from 12 November 2026. USDT, PayPal USD (PYUSD) and Ethena’s USDe are not on the register. Whether a token falls under the opinion is not decided by the register entry alone, however, because the definition in footnote 1 expressly takes applicable exemptions and transitional arrangements into account.
For banks the opinion takes effect through Article 66, just as it does for licensed crypto firms. A credit institution providing crypto-asset services under Article 60 MiCA after notifying its supervisor is exempt from certain obligations, which Article 60(10) lists, and the conduct duty in Article 66 is not among them. Deutsche Bank, for instance, named Bitcoin, Ether and the e-money tokens USDC, EURC and EURAU among the assets for the launch of its custody offering, announced on 16 September and still subject to the regulatory timeline. USDT is not among them. The real burden lies in the controls. Paragraph 22 expects technical, contractual and organisational controls that stop EU clients acquiring non-compliant tokens or increasing their positions. SBS Legal lists interfaces, recurring purchase orders, conversion functions, wallet services and distribution partners as checkpoints, explicitly as a non-exhaustive list. A firm that does not offer USDT itself can still end up with client holdings through a partner, savings-plan logic or an incoming transfer, and it then has to unwind them. Advice and portfolio management are newly covered as well: a discretionary mandate that holds USDT as a liquidity component falls within the expectation, just as an exchange does.
The question that reaches beyond USDT remains open. In its consultation on the MiCA review, the Commission states that MiCA does not currently prohibit multi-issuer models, in which the same token is issued both inside and outside the EU. The European Systemic Risk Board (ESRB) recommended the opposite in October 2025, and, according to reports on its 24 September MiCA review priorities, the EBA rates third-country multi-issuer structures as posing “significant to very significant” risks. The opinion says nothing on the matter. A token such as USDC, whose European tranche comes from an issuer authorised in France, does not fall under the opinion on the wording of footnote 1, but that is not an express exemption by ESMA. How the legislator answers this question will decide whether the opinion marks an end point or the start of a second wind-down.
Recommendations
Check every ART and EMT on offer, in custody and in client accounts against the ESMA register and the issuer’s authorisation. Where an entry is missing, test the exemptions under Article 16(2) and Article 48 MiCA and document the outcome before the supervisor asks.
In 2025 custody, transfer, advice and portfolio management were described as remaining possible or not mentioned at all, and exchange, execution and reception and transmission were caught only where they amounted to an offer. All are covered now. The review should include interfaces, savings plans, conversion functions and offerings through distribution partners that make an acquisition possible indirectly.
Define a purpose, a client group and an end date for sale, conversion, withdrawal, transfer and safekeeping, agree them with the supervisor and tell clients. Residual services are an option for the supervisor rather than an entitlement. The three months are a ceiling, and as a planning date they come too late, since the text asks for remediation as soon as possible.
The controls under paragraph 22 only bite if they also catch deposits from external wallets and automated purchases. Under paragraph 19, warnings alone are expressly insufficient.
ESMA’s proposal for an explicit ban and the question of multi-issuer models now sit with the Commission. Groups operating in London and New York will also need to calculate capital under PS26/12 from 2027 and filter distribution under the GENIUS Act from 2028.
Glossary
E-money token (EMT): a stablecoin pegged to a single official currency, such as USDT, USDC or EURC. In the EU only credit institutions and e-money institutions with a notified white paper may issue one.
Asset-referenced token (ART): a stablecoin pegged to a basket of assets or to several currencies. None has been authorised in the EU so far.
Opinion under Article 29 of the ESMA Regulation: a statement to national competent authorities aimed at aligning supervisory practice. For providers it takes effect through the supervisor that applies it, not directly.
Residual services: the services a supervisor may permit for legacy holdings for a limited period under the opinion, namely liquidation, conversion, withdrawal, transfer and safekeeping. For the provider this is a run-off book with a deadline, not a business.
Christian Schablitzki – the agentic banker
Strategy & Management Consultant · Agentic AI expert for financial institutions
More than 20 years in investment banking and derivatives trading, followed by over 10 years advising financial institutions. Currently a Partner at Infosys Consulting in Germany. Certified as Claude Partner – Claude Code (Anthropic), as well as in Google AI, Generative AI Leader (Google Cloud) and IBM RAG and Agentic AI.
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