EU Regulators Tighten Stablecoin Rules and Advance Digital Euro

European regulators are tightening access to noncompliant stablecoins while planning a digital-euro pilot and urging early preparation for quantum threats that could compromise crypto wallets.

On Oct. 8, the European Securities and Markets Authority (ESMA) told crypto-asset service providers authorized under the Markets in Crypto-Assets Regulation (MiCA) to stop providing services involving non-MiCA-compliant asset-referenced tokens and e-money tokens, commonly known as stablecoins.

National authorities are expected to require firms to address existing client exposures as soon as possible and no later than three months after the opinion’s publication. Remaining services may be limited to liquidation, conversion, withdrawal, transfer or safekeeping, subject to time limits, risk controls and supervision.

The expectations apply across trading platforms, exchanges, order execution, asset placement, order transmission, investment advice, transfers, custody, administration and portfolio management.

The European Central Bank (ECB) is advancing the digital euro as part of a broader effort to strengthen Europe’s payments infrastructure and monetary resilience. Two-thirds of euro-area card payments rely on international card schemes, while 13 of the 21 euro-area countries have no domestic card scheme.

The ECB selected 36 payment service providers for a digital-euro pilot planned for the second half of 2027. The pilot is expected to run for 12 months and would cover online and offline payments, person-to-person transfers, e-commerce and physical-store purchases.

If the necessary legislation is completed by the end of 2026, the ECB aims to be ready for a potential first issuance in 2029. The potential issuance remains conditional on the legislation being adopted.

Europol’s European Cybercrime Centre warned Oct. 7 that quantum computing could eventually undermine the cryptography protecting cryptocurrency wallets.

The recommended response is a phased move toward quantum-resistant cryptography, supported by stronger wallet security and key-management practices. The timing of such quantum capabilities remains uncertain, but system upgrades and coordination would require time.

The announcements place the quantum warning alongside current stablecoin supervision and longer-term payments planning, continuing earlier European concerns about quantum threats to blockchain security.