The transitional period that let crypto-asset businesses operate in the EU under national rules while they applied for a MiCA licence ended on 1 July 2026. That date has now passed. For any business that receives, holds, or settles in a stablecoin, the practical question is no longer when the rules take effect. It is whether the token on the balance sheet is issued by a European-authorised institution, because the window in which that question could be deferred has closed.
What the transitional period was
The Markets in Crypto-Assets Regulation (MiCAR, Regulation (EU) 2023/1114) did not switch on all at once. Its provisions for stablecoins became applicable from 30 June 2024, and its provisions for crypto-asset service providers applied in full from 30 December 2024.
To avoid forcing every existing firm to stop trading overnight, Article 143(3) gave member states discretion to grant a transitional period, commonly called “grandfathering”, of up to 18 months. A crypto-asset service provider that was already operating under national law before 30 December 2024 could continue to provide services until 1 July 2026, or until its MiCA authorisation was granted or refused, whichever came first.
That was a runway to get authorised, not a permanent exemption. The runway has now ended.
The window was not uniform across Europe
The 18-month figure was a maximum, not a default. Member states were free to shorten it, and several did. Germany and Ireland closed their transitional periods on 31 December 2025. The Netherlands, Poland, Latvia, Hungary, and Slovenia opted for roughly six months rather than eighteen.
The result was a patchwork through 2025 and into 2026: the same service could be transitional in one member state and already require full authorisation in another. From 1 July 2026 that patchwork is resolved in one direction. The European Securities and Markets Authority has stated that after that date, any entity providing crypto-asset services to EU clients without a MiCA licence is in breach of EU law and must cease offering those services.
Stablecoin issuance was never grandfathered
The transitional period applied to crypto-asset services: trading, custody, exchange, and the other activities that require CASP authorisation. It is important not to read it as a grace period for issuing stablecoins, because issuance was governed on a different and earlier timetable.
The rules for issuing electronic money tokens, stablecoins referencing a single official currency, applied from 30 June 2024. Under Article 48 of MiCAR, only a credit institution or an authorised electronic money institution may issue an EMT in the EU. There was no 18-month bridge for that requirement. An issuer either held the authorisation or it did not.
The transitional period gave service providers time to get licensed. It never gave anyone permission to issue an unregulated stablecoin into the European market.
The combined effect from July 2026 is that there is no transitional cover left anywhere in the stack. A stablecoin whose issuer holds no EU authorisation has no lawful route to issuance, and the services built around it have no remaining exemption to trade it to EU clients.
What this means for a business holding a non-compliant stablecoin
The largest stablecoin by market capitalisation, Tether’s USDT, has not obtained authorisation as an electronic money institution in the EU and cannot lawfully be issued here as an EMT. It is not alone. Most stablecoins in circulation are issued outside any EU authorisation regime.
For a business that holds or settles in one of these tokens, the end of the transitional period sharpens three exposures that were always present:
- Counterparty risk with no regulatory floor: an unauthorised issuer carries no obligation under EU law to safeguard the funds backing the token, to invest them in low-risk instruments, or to redeem at par on demand. The holder relies on the issuer’s own undertakings, not on a supervised regime.
- Compliance exposure for regulated firms: a payment institution, electronic money institution, or investment firm that routes flows through a non-compliant stablecoin now does so without any transitional argument to fall back on. The activity sits outside the authorised perimeter its own licence assumes.
- Access risk through the service layer: because the CASP transitional period has ended, the exchanges and service providers a business relies on to move in and out of a non-compliant token are themselves under pressure to restrict or remove it for EU clients. Liquidity and access can narrow independently of anything the holder does.
None of this makes an existing holding disappear. It changes what that holding is: not a settled position on regulated infrastructure, but an unregulated liability that the European framework no longer accommodates.
What this means for your business
The diligence question is narrow and it is answerable. For any stablecoin a business receives, holds, or settles in, ask whether it is issued by a MiCA-authorised electronic money institution or credit institution. If it is, the token sits inside the regulated perimeter, with safeguarded backing and an enforceable redemption right. If it is not, the end of the transitional period means there is no longer a timing argument that softens the exposure.
For regulated businesses operating in Europe, that distinction stopped being a forward-looking concern in July 2026. It is now the current state of the rules.
Stable Mint issues EURSM and USDSM as MiCA Title IV compliant electronic money tokens under full EMI authorisation, with segregated backing at regulated European credit institutions and unconditional redemption at par. If you are reviewing the stablecoins in your payment or treasury flows against the current regulatory position, talk to our team.