Kraken, a cryptocurrency exchange, is contemplating the removal of its support for stablecoin Tether (USDT) in the European Union due to the impending implementation of the Markets in Crypto-Assets Regulation (MiCA). The exchange is actively reviewing its plans to comply with the forthcoming MiCA framework, which will be implemented in two phases. The first phase, applicable to stablecoins (asset-referenced tokens and e-money tokens), will be enforced on June 30, 2024. The second phase, applicable to crypto service providers, will come into effect on December 30, 2024.
In response to Kraken’s considerations, Tether has stated that it expects exchanges to focus on providing liquidity in euros for European customers while still maintaining USDT as a solution for on-ramping and off-ramping. The MiCA regulation does not explicitly mention the term “stablecoin,” but it covers both asset-referenced tokens and e-money tokens, which are categorized as stablecoins by the European Banking Authority (EBA) based on specific criteria. For larger stablecoins like USDT, daily transactions are limited to 200 million euros.
Tether’s CEO, Paolo Ardoino, has criticized the European regulation, expressing the company’s reluctance to be regulated under MiCA. Ardoino specifically mentioned the requirement for stablecoin reserves to consist of 60% cash deposits across multiple banks, stating that very few banks in Europe accept this type of business. He highlighted the difficulty in finding even one bank that would accept such deposits. Currently, USDT has a market capitalization of $111.2 billion and a global trading volume of $61.24 billion.
Another cryptocurrency exchange, OKX, took a similar step in March by discontinuing support for USDT trading pairs in the European Economic Area in order to comply with the forthcoming regulations.
Magazine: Are Runes truly an upgrade for Bitcoin, considering that 68% of them are in the red?