Crypto firms authorized under the EU's Markets in Crypto-Assets regulation (MiCA) should resolve EU clients' remaining exposure to non-compliant stablecoins through their services within three months, according to a new opinion from the bloc's markets watchdog.

The European Securities and Markets Authority (ESMA) published the opinion Oct. 8. Where national regulators find legacy exposures, ESMA said they should require remediation as soon as possible and no later than three months after publication, or about Jan. 8, 2027.

National regulators may allow firms that do not yet comply to provide strictly limited services needed for an orderly wind-down and to avoid harm to clients. These can include liquidation, conversion, withdrawal, transfer or safekeeping of existing holdings.

Those exit services should be time-limited, clearly communicated to clients and closely supervised. They should not enable new acquisitions, promotion, active distribution or continued market availability.

National supervisors decide whether to allow them, so customers do not automatically get three months of continued service.

The opinion's legal route is Article 66(1) of MiCA, which requires providers to act in clients' best interests. In ESMA's view, providing any MiCA service involving a non-compliant stablecoin should give rise to a presumption that it is incompatible with that duty, whether or not the individual service constitutes an offer to the public or admission to trading.

ESMA argued that providers cannot adequately mitigate the risks created by missing issuer-level safeguards. Warnings, disclosures and client acknowledgments would not resolve those concerns.

ESMA's Jan. 17, 2025 statement left mere custody and transfers open while restricting trading and other services that constituted public offers.

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