On 1 July 2026, the European Union's transitional window for crypto-asset service providers closed for good. ESMA confirmed that any entity still providing crypto-asset services to EU clients without a MiCA licence from that date is in breach of EU law and must stop offering those services. Any exchange or payments platform without full authorisation had to wind down its EU activity, and any stablecoin whose issuer hadn't secured e-money token authorisation came off the shelf at every licensed venue. That second part caught a lot of payment businesses off guard: USDT, the largest stablecoin in the world by volume, is one of them. Circle's USDC and EURC are not.
If your business settles crypto flows anywhere near the EU, this determines which currency you can actually move through it.
What MiCA regulates when it comes to stablecoins
The Markets in Crypto-Assets Regulation, Regulation (EU) 2023/1114, splits fiat-referenced tokens into two categories under Titles III and IV. Title III covers asset-referenced tokens (ARTs): tokens backed by a basket of currencies, commodities, or other assets. Title IV covers e-money tokens (EMTs): tokens pegged to a single official currency, which is what most stablecoins used in payments actually are. USDT, USDC, and EURC all fall under EMT rules because each references one currency.
The stablecoin-specific rules under Titles III and IV started applying from 30 June 2024, ahead of the broader crypto-asset service provider regime under Title V, which applied from 30 December 2024. Member states were allowed to run transitional arrangements for platforms already operating under national licences, and ESMA reinforced twice (first in a 17 April 2026 statement and again in June) that this window closed EU-wide on 1 July 2026, regardless of whether a given member state had finished adjusting its own national law.
From that date, a MiCA-licensed venue cannot legally offer an unauthorised stablecoin to EU clients, however established or liquid it is.
What issuers actually have to have in place
EMT issuers need to be authorised as either a credit institution or an electronic money institution (EMI). ART issuers need to be an EU legal entity authorised directly by their home regulator. Both come with reserve rules designed to make sure the token can actually be redeemed at par.
For EMTs, that reserve has to hold at least 30% in deposits spread across separate credit institutions, with the remainder in short-dated, low-risk government securities. ARTs face a slightly different bar: reserves need to be highly liquid, with minimal market, credit, and concentration risk. Both regimes require the reserve to sit legally separate from the issuer's own balance sheet, with regular attestations and audits.
There's also a second tier above ordinary authorisation. Tokens that cross certain transaction-volume thresholds get classified as "significant" ARTs or EMTs, which brings direct supervision from the European Banking Authority rather than just the home national regulator. That extra layer matters for anyone relying on a stablecoin at real scale, since it changes who you're ultimately answerable to if something goes wrong with the issuer.
The July 2026 fork in the road: USDT vs USDC
Circle applied for and secured EMI authorisation in France in 2024, which is why both USDC and its euro-pegged sibling EURC kept their listings on EU-licensed platforms straight through the deadline. Tether took a different path. It chose not to apply for EMT authorisation at all, reportedly over disagreements with the reserve-composition and bank-deposit requirements the regime imposes.
USDT remains legal to hold in a self-custody wallet, or on a platform operating entirely outside the EEA. What changed is that a MiCA-licensed exchange or CASP can no longer legally offer USDT trading pairs to EU clients, because doing so would put the venue's own authorisation at risk. Several major platforms moved well ahead of the deadline, delisting USDT pairs and converting remaining EU-client balances into fiat or an authorised alternative once national grace periods expired.
That's the core tension for a payment business: your customers and counterparties might not care what a stablecoin is called, but your licensed venues, banking partners, and settlement rails absolutely do.
What this means if you're a payment business, not just a token holder
Most of what's written about ARTs and EMTs is aimed at the token itself: how it's backed, what happens if the issuer fails. That's a different question from the one a payments or product lead actually needs answered: does the classification of a stablecoin determine whether your business can keep using it?
The answer is yes, indirectly. You can be exposed without being an issuer yourself. If you settle through a MiCA-licensed CASP, or if your banking partner requires that any crypto flowing through your accounts touch an authorised venue at some point, an unauthorised stablecoin becomes a dead end in your settlement chain even though nothing about your own business changed. The classification question stops being about which basket of assets backs a token and starts being about whether your rails will still accept it next quarter — a distinction worth understanding alongside the basics of what a stablecoin actually is and how USDT and USDC differ operationally for business payments.
This is exactly the situation a lot of B2B crypto flows are in right now. A large share of OTC settlement and iGaming off-ramp volume has been standardised on USDT for years, simply because it's the deepest and most liquid pair available. That standardisation now runs straight into the EMT authorisation gap. A business that built its settlement flow around USDT hasn't done anything wrong, but if any part of that flow touches an EU-authorised venue, it needs an answer for what happens when that venue stops accepting the token.
We're in the same position ourselves while our own CASP authorisation works through the pipeline (see our MiCA CASP authorisation guide for what that process actually involves), which is why we're treating this as an open readiness question. The businesses that come out ahead here treat their choice of settlement currency as something to monitor continuously, since the rules and issuer status can change quarter to quarter.
Decision guide: is the stablecoin you're using still usable in the EU?
Run through this before assuming your current settlement currency is fine:
- Single currency or basket? If it references one official currency, it's an EMT under Title IV. If it references a basket, commodity, or multiple currencies, it's an ART under Title III. This determines which set of rules applies.
- Is the issuer actually authorised? Check the issuer's status directly against the EBA's register or the relevant national competent authority rather than assuming scale or reputation means compliance. Market cap doesn't guarantee regulatory status, as the USDT situation shows.
- Does it carry "significant" token status? If so, expect direct EBA-level supervision on top of national authorisation, which can mean additional reporting and prudential requirements feeding back into the issuer's stability.
- Are you, or the venues and banking partners you rely on, MiCA-licensed? If any part of your settlement chain touches an authorised CASP, an unauthorised stablecoin blocks that leg of the flow outright; the venue can't offer it regardless of your preference.
- What's your fallback, and how far out is it? If your current currency fails any of the above, identify the authorised alternative now (an EMT-authorised token, a different settlement route, or a banking partner that doesn't require it) rather than waiting for a delisting notice to force the decision.
The regulation determines which stablecoins are still allowed through the front door of a licensed venue. After 1 July 2026, that determination carries real operational consequences for any payment business relying on one of them.
Recommended reading:
- MiCA CASP authorisation: what payment & OTC firms must have ready to go live in the EU
- What Is a Stablecoin? Types, Backing and How They Stay Pegged
- USDT vs USDC: What's the Difference for Business Payments?
Frequently asked questions
Which stablecoins are regulated under MiCA?
USDC and its euro-pegged sibling EURC are authorised as e-money tokens, since issuer Circle secured EMI authorisation in France in 2024. USDT is not authorised, since Tether chose not to apply for EMT status, which is why it's been delisted from MiCA-licensed EU venues since the 1 July 2026 deadline.
When did MiCA enter into force?
The stablecoin-specific rules under Titles III and IV applied from 30 June 2024, with the broader crypto-asset service provider regime following on 30 December 2024. The last national transitional arrangements for CASPs ended on 1 July 2026.
Who does MiCA apply to?
It applies directly to issuers of asset-referenced and e-money tokens, who need authorisation as a credit institution or EMI (EMTs) or as an authorised EU legal entity (ARTs), and to crypto-asset service providers, who can only offer authorised tokens to EU clients once licensed.
What are the requirements for MiCA?
Issuers need authorisation as a credit institution or EMI for e-money tokens, or as an authorised EU legal entity for asset-referenced tokens, plus reserve requirements: at least 30% in separate bank deposits for EMTs, and highly liquid, low-risk assets for ARTs, with regular attestations and audits.