Kraken, a cryptocurrency exchange that has been operating for over a decade, is reportedly reviewing its development plans due to the European Union’s Markets in Crypto Assets Regulation (MiCA). This review includes the possibility of removing support for the largest USD stablecoin, USDT. However, a senior executive at Kraken clarified that there are currently no plans to delist the USDT trading pair.
MiCA, which regulates stablecoins, is set to come into effect no earlier than July 2024. The regulation states that only electronic money institutions (EMIs) and credit institutions can issue stablecoins.
Marcus Hughes, the global head of regulatory strategy at Kraken, told Bloomberg that the new regulations will reduce the number and types of stablecoins available in Europe, depending on which companies comply with EU standards. He added that Kraken is preparing for all possible scenarios, including the possibility of not being able to continue listing tokens like USDT. However, Hughes emphasized that the company will make a definitive decision once the regulations and overall situation become clearer.
On the other hand, Mark Greenberg, the global head of asset growth and management business at Kraken, recently clarified on the X platform that Kraken will continue to list USDT in Europe and has no plans to delist it. He mentioned that they understand the importance of USDT to European customers and will consider all options related to providing USDT under the new regulations. Greenberg assured that they will comply with all legal requirements and continue to make every effort to offer relevant stablecoins to their European customers.
Tether, the issuer of USDT, expects exchanges to retain USDT trading pairs for European customers as a solution for fund transfers, according to a spokesperson. The spokesperson also expressed Tether CEO Paolo Ardoino’s concerns about the MiCA regulations and stated that Tether will continue to engage in dialogue with regulatory authorities. In an interview with The Big Whale in April, Ardoino revealed that Tether currently has no plans to comply with MiCA regulations in the near future.
Under MiCA regulations, issuers of statutory stablecoins must comply with existing EU Electronic Money Directives. Starting from July 2024, issuers will need to maintain sufficient reserves to meet large-scale withdrawal requests, and larger stablecoins will also have to set transaction limits.
In fact, many cryptocurrency exchanges have made adjustments due to the MiCA regulations. For example, OKX delisted USDT for EU users in March but continued to support USDC from Circle, a stablecoin issuer that prioritizes compliance. Circle has also applied for licenses as an electronic money institution and a digital asset service provider from the French Prudential Supervision and Resolution Authority and the French Financial Markets Authority in order to operate legally in France.
Additionally, Marina Parthuisot, the legal director of Binance in France, previously stated in September 2023 that they plan to delist stablecoins from the European market by June 2024. However, Binance CEO Changpeng Zhao clarified on X that Parthuisot’s statement was taken out of context and that the company has several compliant partners who have launched Euro and other stablecoins.
Source: Bloomberg, CryptoSlate