Binance Announces Impact of New MiCA Stablecoin Rules on EEA Users

The new MiCA stablecoin regulations will be implemented across the European Economic Area (EEA) on June 30th, 2024 (UTC+3). This marks the initial phase of a new regulatory framework that will significantly impact the EEA’s stablecoin market.

Understanding these upcoming changes is crucial for all users. Here’s a breakdown of the key points regarding the new rules and how Binance is adhering to them.

MiCA Stablecoin Rule Compliance: Product Impacts for EEA Users

Starting June 30th, 2024 (UTC+3), stablecoins in the EEA will be subject to regulations. In essence, only authorized companies will be able to issue and offer stablecoins to the public, with these coins being classified as “Regulated Stablecoins.”

Several existing stablecoins might not fall under this category and will face limitations. These will be categorized as “Unauthorized Stablecoins.”

Binance will implement phased adjustments to the availability of Unauthorized Stablecoins, as detailed below. These transitional measures aim to facilitate a smooth transition for EEA users to Regulated Stablecoins while complying with MiCA regulations and avoiding market disruption.

Product-Specific Restrictions for EEA Users:

• Binance Convert: Convert functionality for Unauthorized Stablecoins will be limited to “sell-only” mode. This allows EEA users to sell their Unauthorized Stablecoins for other digital assets (Bitcoin or Ether), Regulated Stablecoins, or fiat currencies (depending on their jurisdiction’s fiat availability). Buying Unauthorized Stablecoins with Convert will be disabled from June 30th, 2024 (UTC+3).
• Spot Trading: Spot trading pairs with Unauthorized Stablecoins will remain available for the time being. During this interim period, both digital asset trading pairs with Unauthorized Stablecoins and those with Regulated Stablecoins will coexist.
• Wallet: Custody and wallet services for Unauthorized Stablecoins will continue. Users can withdraw or deposit stablecoins to and from their Binance wallets.

General Product Restrictions:

Beyond the aforementioned products (Binance Convert, Spot Trading, and Wallet), Binance will implement product restrictions across its entire product suite. These restrictions aim to prevent users from entering into new product offerings or services involving Unauthorized Stablecoins. It’s important to note that specific product impacts beyond this general restriction will be effective by June 30th, 2024 (UTC+3), unless otherwise specified.

Here’s a breakdown of the limitations across various product categories:

• Rewards: Platform-wide rewards (Rewards Center, Campaigns, Referrals) will be switched to Regulated Stablecoins, BNB, or other non-stablecoin tokens. Users with existing vouchers involving Unauthorized Stablecoins can still claim them until their expiration date.
• Spot Copy Trading: Spot Copy Trading will cease for EEA users from June 29th, 2024 (11:59 PM UTC+3). Impacted Lead Traders and Copy Traders are advised to close their Copy Trading positions and transfer their funds back to their respective Spot Wallets before the deadline.
• Margin: New borrowing and transferring of Unauthorized Stablecoins as collateral into Margin Wallets will be blocked. Users might need to utilize alternative margin collateral or decrease their positions to prevent liquidation depending on the specific Margin product. Existing Margin loans remain unaffected and won’t be subject to forced liquidation until further notice. However, impacted Margin traders are encouraged to close margin loans involving Unauthorized Stablecoins. Existing holdings of Unauthorized Stablecoins in Margin Wallets can still be used for trading for now.
• Launchpad & Launchpool: The FDUSD pool will no longer be available for EEA users.
• Simple Earn: New subscriptions and Auto-Subscribe features involving Unauthorized Stablecoins will be blocked across Simple Earn Flexible and Locked Products (including products like GNS Locked Products with DAI rewards) before June 29th, 2024 (UTC+3). Existing Simple Earn subscriptions with Unauthorized Stablecoins remain unaffected and won’t be subject to forced redemption until further notice.
• Binance Loans & VIP Loans: New Loan subscriptions and new incremental collateral involving Unauthorized Stablecoins will be blocked before June 29th, 2024 (UTC+3). Existing fixed-term Loans with Unauthorized Stablecoins will be held until maturity and won’t be subject to forced repayment. Existing collateral and loans of Unauthorized Stablecoins will be kept open until repayment. Topping up with Unauthorized Stablecoins to improve Loan-to-Value ratio (when used as collateral) will remain unaffected to prevent forced liquidation.
• Auto-Invest: New Auto-Invest subscriptions with Unauthorized Stablecoins will be blocked. Existing plans involving selling Unauthorized Stablecoins can continue until their holdings in the Earn Wallet are depleted. Existing plans involving buying Unauthorized Stablecoins will no longer be available to EEA users.