ESMA tells supervisors to stop CASPs servicing non-MiCA-compliant stablecoins
An opinion to national supervisors, published on 8 October 2026, says authorised crypto-asset service providers should not provide services in stablecoins that do not comply with MiCA, except for limited wind-down services, and that warnings, disclosures or client acknowledgements do not change that.
At a glance
What: an ESMA opinion to national competent authorities (NCAs), issued under Article 29(1)(a) of the ESMA Regulation on 8 October 2026.
Who: crypto-asset service providers (CASPs) authorised under MiCA and serving EU clients. No token is named.
Expectation: no MiCA service in non-compliant asset-referenced tokens (ARTs) or e-money tokens (EMTs), and no reliance on client warnings as a cure.
Deadline: legacy exposures that NCAs identify should be remediated as soon as possible, and no later than three months after publication (8 January 2027, our calculation).
MiCA's stablecoin rules, in Titles III and IV, bind issuers. In our view, ESMA's latest opinion shifts the practical burden to the firms that trade, transfer and safeguard those tokens. On 8 October 2026, ESMA told NCAs that CASPs authorised under MiCA should not provide services in ARTs and EMTs that do not meet MiCA's requirements. The opinion names no token, so each firm will need to make its own assessment, including of any exemptions or transitional arrangements.
What ESMA published
The opinion (ESMA75-113276571-1742) runs to five pages. It is issued under Article 29(1)(a) of the ESMA Regulation (Regulation (EU) No 1095/2010), the power ESMA uses to build "a common Union supervisory culture and consistent supervisory practices". It is addressed "primarily to national competent authorities", so, in our view, its practical force depends largely on how each NCA applies it. However, it also sets out expectations of CASPs directly (paras 12 and 22).
Its central sentence (para 12) reads: "CASPs should not provide crypto-asset services in relation to ARTs or EMTs that are not compliant with the applicable requirements under MiCA". A token is non-compliant where it does not meet the conditions for a lawful offer to the public or admission to trading in the EU under Title III or Title IV of MiCA, "including any applicable exemptions or transitional arrangements", are not met (footnote 1).
The opinion complements Commission Q&A 2404 and ESMA's earlier public statement on the provision of certain crypto-asset services in relation to non-MiCA-compliant ARTs and EMTs. ESMA says "further guidance is required" on additional aspects (para 4).
Why ESMA puts the onus on CASPs
ESMA's reasoning turns on where the risk comes from. A service in a non-compliant token exposes clients to risks that are "inherent to the non-compliant status" of the token, "due to the absence of the issuer-level safeguards required by MiCA". In ESMA's view, those risks "cannot be adequately identified, managed or mitigated through the measures available to the CASP" (para 13).
ESMA says this should give rise to a "presumption" that providing any MiCA service in such a token is incompatible with Article 66(1), the duty to act honestly, fairly and professionally in the best interests of clients and prospective clients, because the CASP would "knowingly facilitate client exposure to risks created by the absence of Title III/IV safeguards".
What we call the Safeguard Substitution problem (our term, not ESMA's) follows from this: a service provider's own controls cannot stand in for the redemption rights, reserve-of-assets and safeguarding requirements, governance obligations and supervisory oversight that MiCA places on issuers. ESMA gives three further reasons (paras 16 to 18): continued availability would allow "systematic circumvention" of the issuer rules, create "an uneven playing field" between compliant and non-compliant issuers, and undermine investor confidence. Separately, it says such services hinder NCAs' ability to ensure full compliance with MiCA (para 20).
The conclusion does not depend on whether each service is itself an offer to the public or admission to trading (para 14). It rests on CASPs' Title V obligations, notably Article 66(1), and on protecting the objectives of Titles III and IV.
Disclosure is not a defence.
"…reliance on warnings, disclosures or client acknowledgements would not sufficiently address the concerns identified in this Opinion." (ESMA, para 19)
In our view, the opinion closes the obvious workaround. Among ESMA's reasons: warnings do not prevent the continued availability and use of the tokens, the MiCA protections "operate collectively", and expecting clients to assess the implications of their absence is "highly unlikely to enable them to evaluate the risks involved accuratelyo accurately evaluate the risks involved".
In our view, for firms that kept non-compliant stablecoins available behind a risk warning or an acknowledgement screen, this is the most important paragraph in the document.
What the opinion covers
ESMA expects NCAs to consider every MiCA service, "individually or in combination": operating a trading platform, exchange services, execution of orders, reception and transmission of orders, placing, advice, transfer services, custody and portfolio management (para 21).
CASPs "should not maintain, introduce or facilitate access to" non-compliant ARTs or EMTs for EU clients, and should put in place "technical, contractual and organisational controls", including controls preventing EU clients from "acquiring or increasing positions" (para 22).
What survives: the wind-down
NCAs may allow CASPs that do not yet comply to provide "strictly limited residual services where they are necessary to ensure an orderly wind-down and to avoid client detriment" (para 23). Those services should be limited to "the liquidation, conversion, withdrawal, transfer or safekeeping of existing holdings", should not facilitate "new acquisitions, promotion, trading, active distribution or continued market availability", and should be "time-limited, clearly communicated to clients and subject to close supervisory scrutiny" (para 24).
For legacy exposures, para 27 in the Conclusion is narrower. Where NCAs identify them, they "should require remediation as soon as possible and no later than three (3) months following the date of publication of this Opinion", and any continuing service should be "strictly limited to sell-only, conversion, transfer or withdrawal functionalities" (para 27). Three months from publication on 8 October 2026 is 8 January 2027 (our calculation).
Safekeeping appears in the wind-down list (para 24) but not in the legacy-exposure list (para 27), which also replaces "liquidation" with "sell-only". ESMA's press release, however, includes safekeeping in its list for "pre-existing exposures". In our view, custodians should work to the opinion's narrower text and confirm the position with their NCA.
What the opinion does not do
It does not change the position in Commission Q&A 2404 and ESMA's earlier statement on when a service may amount to an offer to the public, admission to trading or placing, and it does not treat every service as one (paras 6 and 7). It is without prejudice to the EBA's and the competent authorities' competences over the authorisation and supervision of issuers, and to any future ESMA opinions or convergence tools (para 10). In our view, as an opinion to supervisors, it is not a directly binding rule on firms, and its effect depends on how each NCA applies it.
Business model, product and revenue
Business model. In our view, the CASP becomes the point at which NCAs enforce MiCA's issuer rules in practice, and a MiCA-authorised CASP that relies on non-compliant stablecoins for trading pairs, settlement or client balances, and serves EU clients, now needs a compliant alternative. The three-month outer limit applies only to remediating legacy exposures that NCAs identify, and wind-down relief is at each NCA's discretion.
Product. Listings, conversion routes, custody wallets and transfer functions all need controls that stop new exposure while allowing clients to sell, convert, transfer or withdraw what they already hold, to the extent the NCA permits.
Revenue. In our view, EU revenue from these tokens winds down as NCAs act, and some volume moves to MiCA-compliant EMTs or ARTs.
What firms can do now?
Build the inventory. List every token, trading pair, wallet,t and client balance that involves an ART or EMT, by EU entity, and record whether each token meets MiCA's conditions, including any applicable exemptions or transitional arrangements.
Engage the NCA early. Find out which residual wind-down services it will permit, and for how long, before designing the client journey.
Write the client communication. ESMA expects residual services to be clearly communicated to clients, so clients will need notice of what they can still do (sell, convert, transfer or withdraw) and by when.
T
imeline
8 October 2026: opinion published (ESMA75-113276571-1742).
8 January 2027 (our calculation): outer limit for remediating legacy exposures that NCAs identify, based on ESMA's "no later than three (3) months"; ESMA also says "as soon as possible".
Not yet set: how each NCA applies the opinion. ESMA says it will, in cooperation with NCAs, "regularly monitor the timely application of this Opinion" (para 28).
Sources
James Ross, Head of Advisory, denouement. For information only, not legal advice.
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