The European Securities and Markets Authority wants to extend Europe’s restrictions on non-compliant stablecoins beyond trading to the services that let customers keep and move them. If adopted as proposed, the change would remove the option of leaving such tokens with a licensed custodian after their trading pairs disappear.

In its September 30, 2026 response to a review of the EU’s Markets in Crypto-Assets regulation (MiCA), ESMA asks the European Commission to prohibit every licensable crypto-asset service involving stablecoins that fail the regulation’s applicable requirements. Custody and transfers fall within that service list. The consequence would reach existing holders who have stopped trading, as well as customers seeking to buy.

That is a further step from the regulator’s January 2025 approach, which said mere custody and transfer should remain possible. It could give compliant tokens a wider advantage in European distribution, but neither a forced conversion timetable nor a global demand shift follows from the proposal.

ESMA’s January 17, 2025 statement distinguished services that offered non-compliant stablecoins to the public or admitted them to trading from simply holding or transferring them. Platforms were expected to stop making the tokens available for trading, and other services had to cease where they constituted an offer to the public.

Under that earlier transition, acquisition restrictions were expected by the end of January 2025, with temporary sell-only services through the end of the quarter.

For an investor, the custody distinction mattered. Losing access to a trading pair did not necessarily mean losing the service that safeguarded an existing balance or enabled its withdrawal. ESMA acknowledged that investors retaining those holdings could face worse execution conditions, even while custody and transfer remained possible.

A historical example shows the distinction. In its March 3, 2025 reporting , CryptoSlate said Binance planned to remove nine tokens’ trading pairs for European Economic Area users by March 31 while keeping deposits, withdrawals, conversions and custody available. This was the exchange’s announced approach in March 2025.

The September response would replace the activity-by-activity distinction with a broader asset-compliance test. ESMA argues that the lack of a clear prohibition creates disparities between compliant and non-compliant issuers and facilitates regulatory arbitrage.