After the ECB, ESMA locks down stablecoins deemed non-compliant with MiCA rules

On 8 October 2026, the European Securities and Markets Authority (ESMA), the independent authority responsible for regulating and supervising the EU’s financial markets, asked authorised crypto platforms to stop providing any services involving stablecoins that do not comply with the MiCA regulation to their European clients. At present, only certain stablecoins, such as USDC and EURC, issued by Circle, which is authorised in France, can still be offered.

A stablecoin is a digital token whose value is pegged to a fiat currency, such as the dollar or the euro. It is used as a means of payment and a stable store of value in the crypto-asset world, in particular to make purchases, trades and investments easier without the volatility traditionally associated with cryptocurrencies.

ESMA’s opinion covers, first and foremost, trading, custody, transfers, advice and portfolio management. Clients who already hold these tokens will be able to sell, convert, transfer or withdraw them only for a limited period. National authorities in the member states must require platforms to comply by 8 January 2027 at the latest, three months after the opinion. After that date, a European citizen will no longer be able to buy or hold, on an authorised trading platform, any stablecoin whose issuer is not authorised in the European Union.

Back in January 2025, ESMA had asked platforms to stop trading these non-compliant tokens, giving clients only until the end of March to sell or convert them. Custody and transfers are now also affected.

On 22 September, the European Central Bank (ECB) and the national central banks, which together form the European System of Central Banks, had already asked the Commission to extend the ban on paying interest on stablecoins to lending and staking (locking up tokens to help run a network in exchange for a reward). ESMA is therefore not the only institution seeking to rein in stablecoins: the ECB is also highly critical of them.

Speaking in Portugal in July 2025, ECB President Christine Lagarde had already voiced her concerns, warning against the rise of stablecoins, which in her view could lead to the emergence of ‘new private monies’. She also argued that stablecoins pose a significant risk not only to national sovereignty but also to money as a ‘public good’.

For central banks, the main risk of these digital assets is their widespread popularity, as people see them as a relatively simple way to gain exposure to currencies other than their own. Such scope for currency arbitrage would penalise some fiat currencies to the benefit of others, such as the US dollar.

According to the American magazine Fortune, central banks are above all concerned that this success will reduce the amount of money held in traditional banks, and therefore the effectiveness of their monetary policy. Christine Lagarde summed it up as follows in Sintra:

‘I fear that this blurring of boundaries will lead to a privatisation of money. I do not think that is what we were appointed for, and it is not good for the public good that is money.’

Christine Lagarde, like Andrew Bailey, Governor of the Bank of England, argues that stablecoins ‘claim’ to be money that they are not. In their view, they cannot be money, because they are issued not by public authorities but by companies, in other words by the market itself.

Competition between private currencies is now limited to authorised issuers. For European savers, choosing a digital currency now means going through an administrative gatekeeper first.