ESMA Sets Supervisory Expectations for Noncompliant Stablecoin Services
ESMA published an opinion on October 8, 2026, addressed primarily to national competent authorities, on crypto asset services involving asset referenced tokens and electronic money tokens that do not meet MiCA requirements. It sets out supervisory expectations that authorised providers should not maintain, introduce or facilitate access to these tokens for EU clients through any MiCA service, individually or in combination. Supervisors should ensure technical, contractual and organisational controls prevent clients from acquiring or increasing exposure. Strictly limited residual services may be allowed for liquidation, conversion, withdrawal, transfer or safekeeping of existing holdings to protect clients and support an orderly wind down. These services must be temporary and closely supervised, without new acquisitions or continued market availability. Where supervisors identify legacy exposures, ESMA expects remediation as soon as possible and no later than three months after publication. The opinion does not impose an immediate blanket freeze or name particular stablecoins.
PARADIGM INSIGHTS:
Stopping new exposure and protecting existing holders are different tasks. Providers should map the real services, client holdings and controls needed for a supervised wind down, rather than treat a token label as the whole compliance answer. The opinion's distinction between continued availability and limited exit services matters for custody and transfer planning. Its supervisory expectations do not by themselves establish that every contract is impossible to perform or that every existing balance is frozen.
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