Uphold, a popular cryptocurrency exchange, has informed its European users that it will no longer support six stablecoins starting from July 1. This decision is in line with the European Union’s Markets in Crypto-Assets Regulation (MiCA). The stablecoins being delisted are Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users holding these stablecoins must convert them to a different cryptocurrency by June 28, as Uphold will automatically convert them into USD Coin (USDC).
MiCA, which became law in May 2023 and partially took effect in June 2023, is set to have full force by the end of 2024. The new stablecoin framework under MiCA imposes stricter regulatory requirements on fiat-backed stablecoins and e-money tokens. These regulations are aimed at increasing consumer confidence in digital currencies by ensuring stability and reliability in their use as a store of value and for payments.
On June 30, MiCA’s stablecoin regulations will come into effect in the European Economic Area, leading to significant changes in the market listings of crypto exchanges to comply with the new rules. Uphold and other exchanges are making necessary adjustments to align with the regulations, which are overseen by the European Banking Authority.
Under MiCA, stablecoin issuers in the EU must obtain licenses as credit institutions or Electronic Money Institutions. The regulations also require fiat-backed stablecoins to be backed by a 1:1 ratio of liquid reserve and stored in custody by a third party. Algorithmic stablecoins are prohibited under the new rules.
In response to MiCA, other major exchanges like Binance have revised their stablecoin listing policies. Binance has categorized stablecoins into “regulated” and “unauthorized” coins, although the specific classification of each stablecoin is yet to be determined. OKX has already delisted Tether in Europe, while Kraken is evaluating its support for USDT in the region.
Overall, the implementation of MiCA’s stablecoin regulations is expected to bring significant changes to the cryptocurrency landscape in Europe, with a focus on ensuring stability, security, and compliance within the industry.