The rules

Lesson 3 of 4

By the end of this lesson you’ll be able to say what an issuer has to do under EU, US and UK law, check whether a coin’s issuer is on the EU register, and explain why none of these rules makes a stablecoin as safe as a bank deposit.

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The EU: MiCA

The EU’s Markets in Crypto-Assets Regulation, MiCA, has applied to stablecoins since 30 June 2024. It calls a dollar or euro stablecoin an e-money token, “a type of crypto-asset that purports to maintain a stable value by referencing the value of one official currency.”

MiCA’s main rules

Who may issue

Only a company licensed “as a credit institution or as an electronic money institution,” which has filed a white paper with its regulator. A bank, in other words, or a payments firm under bank-like supervision.

Issue and redeem at par

Issuers must “issue e-money tokens at par value and on the receipt of funds,” and must redeem “at any time and at par value.” Redemption “shall not be subject to a fee.”

No interest

Issuers “shall not grant interest in relation to e-money tokens,” and neither may the exchanges and brokers that handle them. Any benefit tied to how long you hold the token counts as interest, whoever pays it.

Say what you aren’t

The white paper’s first page must carry the line “This crypto-asset white paper has not been approved by any competent authority in any Member State of the European Union,” and the paper must also warn that the token “is not covered by the deposit guarantee schemes.”

The EU’s markets regulator, ESMA, told exchanges in January 2025 to stop offering tokens whose issuers had no license “as soon as possible and no later than the end of Q1 2025.” On 8 October 2026 it went further: licensed firms “should cease providing services related to non-MiCA-compliant stablecoins to clients in the European Union,” keeping only what’s needed for the “liquidation, conversion, withdrawal, transfer or safekeeping” of what clients already hold.

ESMA publishes the register, updated weekly. On 6 November 2026 its list of e-money token issuers included Circle’s French company, licensed on 1 July 2024 for USDC and EURC. USDC is now the EU’s first “significant” e-money token, so from 12 November 2026 the European Banking Authority oversees its reserve.

Tether, whose USDT is more than 60 percent of the market, isn’t on it. That’s why EU exchanges had to stop offering USDT in 2025, and why an EU reader who holds it holds a token outside the rules.

ESMA has told national regulators to have firms wind down their remaining services in such tokens by 8 January 2027. That deadline is the firm’s. If a licensed EU firm holds USDT for you, expect it to ask you to sell, convert or move it.

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The rules

The EU: MiCA

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