EU Moves to Rewrite MiCA Rules After Tether’s USDT Sidelines Itself

EU MiCA stablecoin rules are now in their first formal review. The European Commission opened a consultation on 20 May 2026 to revise the Markets in Crypto-Assets Regulation (MiCA), the bloc’s 2024 crypto framework, with non-EU issuers squarely in scope. The exercise follows the July 2025 signing of the United States’ Guiding and Establishing National Innovation for US Stablecoins (GENIUS) Act, and is the first formal step under Article 140 of MiCA.

The Commission is accepting feedback through 31 August 2026 and must report to the European Parliament and Council by 30 June 2027. The 86-question document most directly targets non-EU stablecoin issuers, a category in which Tether’s USDT has effectively opted out by never applying for MiCA authorisation. Industry participants have already started calling the proposed revision "MiCA 2.0."

MiCA’s First Formal Review

The consultation, run by the Commission’s directorate-general for financial services, spans four thematic blocks: scope and definitions for non-stablecoin crypto-assets; rules for asset-referenced tokens (ARTs) and e-money tokens (EMTs); the regime for crypto-asset service providers (CASPs); and areas outside MiCA’s original scope, including decentralised finance, prediction markets, tokenised deposits and on-chain native assets. The Commission is inviting feedback through both a public questionnaire and a more detailed targeted questionnaire aimed at issuers, service providers, financial institutions and academics.

Stablecoins take up the most space in the document. The Commission asks stakeholders to assess, on a 5 to 10-year horizon, whether stablecoins should become a mainstream EU payment instrument, a wholesale settlement rail, a complement to existing payment methods, or a product eventually displaced by central bank digital currencies. Practical reserve questions, including whether the existing 30% and 60% minimum deposit percentages for issuers are appropriate, also appear. The consultation is open in two parallel tracks, one public and one targeted.

Commission language frames the exercise as a check on whether the 2024 framework "remains fit for purpose," given continued market change and "significant" shifts in global policy. The Commission has tied the review, in part, to its broader simplification agenda, asking whether "administrative or other burdens emanating from MiCA and its implementation measures can be simplified, reduced or dispensed with."

• 86: questions in the Commission’s targeted consultation.
• 31 August 2026: deadline for stakeholder responses.
• 30 June 2027: deadline for the Commission’s report to Parliament and Council.
• 0: asset-referenced tokens licensed in the EU under MiCA to date.

Why the US GENIUS Act Moved the Date

The consultation followed the GENIUS Act, signed by President Donald Trump in July 2025. The American statute requires 100% reserve backing with liquid assets such as US dollars and short-term Treasuries, mandates monthly public disclosures of reserves, subjects issuers to the Bank Secrecy Act, and prioritises stablecoin holders’ claims over all other creditors in an issuer’s insolvency. The law creates a controlled route for foreign issuers whose tokens reach the US market: registration with the Comptroller of the Currency, and US-custodied reserves sufficient for US demand, unless a reciprocal arrangement says otherwise.

EU officials have now described reopening MiCA as a 2027 revision framed as unavoidable, citing pressure from the European Central Bank and other EU institutions, and from the need to keep pace with the most recent regulatory and technological shifts abroad. Stablecoin transaction volumes rose 72% in 2025 to $33 trillion (€28 trillion) per Artemis Analytics data, and about 95% of stablecoins worldwide are backed by the US dollar.

The ECB itself unveiled a payments strategy at the end of March 2026, including two network infrastructures known as Pontes and Appia, designed to adapt the institution to tokenisation and distributed ledger technology. Some of those same pressures are visible in how JPMorgan, BofA, Tether and Stripe are racing for the same stablecoin rail, even as EU regulators look to revise MiCA’s rules for global issuers.

Reopening the file seems unavoidable at this stage, not only in light of the position expressed by several European institutions (not least the ECB), but also to cater for the most recent regulatory and technological developments worldwide.

An EU diplomat familiar with the discussions, as quoted by Euronews, framed the concern as one shared with Washington: globally transferable stablecoins can be issued, distributed or managed across several jurisdictions, but redemption pressure, liquidity risk and consumer protection land locally. MiCA’s current text, in the Commission’s view, does not prohibit multi-issuer models, but the European Systemic Risk Board recommended in September 2025 that the Commission should not treat such schemes as permitted. The ECB published a non-paper on the same question on 10 April 2026. The Commission’s consultation asks whether MiCA should instead introduce an equivalence regime for global stablecoins.

Tether, Circle, and the Non-EU Stablecoin Question

The non-EU issuer in focus is Tether, issuer of USDT, the world’s largest stablecoin by circulation. Tether has not applied for MiCA authorisation as of June 2026, a stance that aligns with its broader posture of focusing on markets outside Europe and avoiding the bloc’s mandated bank-deposit reserves. Major EU-licensed venues, including Coinbase Europe (December 2024), Crypto.com (January 2025) and Binance’s EEA entity (March 2025), have delisted or restricted USDT; Tether also discontinued its euro-denominated EURT in 2024.

The practical outcome on EU-licensed venues is a shift to USDC. Circle’s USDC and EURC tokens have secured MiCA compliance and remain available across EU-licensed exchanges, and BNY added USDC as the first stablecoin on its Digital Asset Custody platform on 1 July 2026.

The consultation reopened the policy question of multi-issuance models, where the same token is issued by entities licensed in different jurisdictions. That debate is the most geopolitically charged part of the consultation, and the one most likely to determine whether the EU ends up with its own equivalence regime for global stablecoins. The Commission’s questions in this block are also the closest mirror of what the US GENIUS Act already addresses.

ESMA’s Operational Crackdown

While the Commission consults, the European Securities and Markets Authority has spent 2026 hardening the existing framework. On 23 June 2026, ESMA directed unauthorised EU crypto firms to wind down as the MiCA transitional period closed on 1 July 2026.

The order bars unauthorised firms, EU or non-EU, from onboarding new EU clients, opening accounts, marketing or soliciting business. Services may continue only as needed to sell or transfer crypto-assets, reallocate assets or close positions. ESMA also reminded non-EU CASPs that they cannot provide MiCA services to EU clients, including in business-to-business contexts, and that custody cannot be outsourced to entities that are not themselves authorised CASPs.

The fallout on the licensed side is already visible. Of more than 1,200 firms that previously held national crypto registrations across the EU, around 210 had obtained full MiCA authorisation by May 2026, a conversion rate of well under a fifth. France’s markets watchdog has cautioned that continuing to operate without authorisation could expose companies to criminal prosecution. ESMA confirmed in April that the MiCA transitional period would not be extended.

ESMA has also launched a Common Supervisory Action on CASP custody resilience that runs from the second half of 2026 to the first half of 2027, with findings consolidated into a final report for ESMA’s Board of Supervisors in the second half of 2027. The CSA will probe governance arrangements, key and storage management, transaction controls, incident detection, smart contract risks, and dependencies on third-party providers. The shift to licensed custody by smaller EU apps is already visible as smaller crypto firms move onto licensed custody rails.

The Timeline Ahead

Legal experts have suggested formal legislative proposals are unlikely before 2028, given the European Union’s ordinary lawmaking process. The Article 140 report on MiCA application, due 30 June 2027, will land first. ESMA’s Common Supervisory Action on CASP resilience is running in parallel through the first half of 2027, with findings consolidated separately for ESMA’s Board of Supervisors by the second half of 2027. Major milestones on the path to a revised regime are listed below.

Between now and any legislative proposal, the framework’s drift will be felt most by non-EU issuers, whose products the bloc has begun to specifically police. The consultation’s late-summer window will determine how exposed those firms become to bloc-level rules by 2028. The ESMA track on CASP resilience will continue running in parallel, regardless of when Brussels delivers a revised text.

1. 31 August 2026: consultation closes; responses feed into Commission analysis.
2. Second half of 2026 to first half of 2027: ESMA Common Supervisory Action on CASPs’ operational resilience runs in parallel.
3. 30 June 2027: Commission report on MiCA application, with a legislative proposal possible.
4. 2028 (earliest): formal MiCA revision could clear European Parliament and Council under ordinary procedure.

Frequently Asked Questions

What is the MiCA review happening in 2026?

The European Commission launched a targeted and public consultation on 20 May 2026 to assess whether MiCA, in force in stages since 2024, still matches the digital asset market and the post-GENIUS environment. The consultation runs through 31 August 2026 and covers crypto-asset definitions, stablecoin rules, the CASP regime, and topics MiCA never addressed, including DeFi and tokenised deposits.

Why is the EU reviewing MiCA now?

Two forces have changed since MiCA was drafted: rapid growth in stablecoin volumes (72% in 2025 to $33 trillion or €28 trillion, per Artemis Analytics), and the July 2025 signing of the US GENIUS Act, which created the first federal US framework for stablecoin issuers. EU officials have told outlets the revision "seems unavoidable."

What does this mean for Tether and USDT in Europe?

Tether has not applied for MiCA authorisation as of June 2026. USDT has been delisted or restricted across major EU-licensed venues since December 2024. Self-custody wallet users can still hold USDT, but EU-licensed exchanges, brokers and wallet services can no longer offer the token to retail or institutional clients under the wind-down rules ESMA published on 23 June 2026.

What is the difference between ARTs and EMTs under MiCA?

MiCA distinguishes asset-referenced tokens (ARTs), pegged to a basket of assets, and e-money tokens (EMTs), pegged to a single fiat currency such as the euro. The Commission’s review asks whether the two regimes should be recalibrated in light of multi-issuance models and whether the existing 30% to 60% minimum deposit mandates for issuers’ reserves remain appropriate. No ARTs have been licensed in the EU under MiCA to date.

When might formal MiCA revisions take effect?

Article 140 of MiCA requires the Commission to report to Parliament and Council by 30 June 2027 and to accompany that report with a legislative proposal where appropriate. Any formal revisions would still need to clear the European Parliament and Council under ordinary procedure, and legal experts suggest formal legislative proposals are unlikely before 2028.

Disclaimer: This article is for informational purposes only and does not constitute financial, investment, legal, or tax advice. Crypto and stablecoin regulation is evolving rapidly; figures, deadlines and requirements cited above are accurate as of 9 July 2026 and may change. Consult a qualified professional before making decisions based on digital assets or their regulation in your jurisdiction.