ESMA proposes ending EU custody and transfer services for non-compliant stablecoins

According to CryptoSlate, the European Securities and Markets Authority proposed extending restrictions on non-compliant stablecoins to cover custody and transfer services within the European Union. In a response submitted on September 30, 2026, regarding a review of the Markets in Crypto-Assets regulation, the authority recommended prohibiting every licensable crypto-asset service involving stablecoins that fail applicable requirements. This policy shift would impact existing holders who have stopped trading and customers seeking to buy, going further than a previous January 2025 approach that permitted mere custody and transfer. The proposal sets no implementation date, withdrawal exception, or wind-down mechanism, leaving future legislation to determine how an end to custody would reconcile with existing obligations to return client assets. The submission targets professional services rather than banning personal ownership, freezing tokens, or prescribing compulsory conversion. If the proposal is adopted into law, compliant tokens could gain a broader distribution advantage by retaining access to regulated custody and transfer channels while non-compliant tokens lose them.