Key Takeaways:
- Kraken is considering removing support for Tether (USDT) in the EU due to upcoming MiCA regulations.
- MiCA’s rules for stablecoins will start on June 30, 2024, with broader crypto service regulations from December 30, 2024.
- Tether’s CEO criticized the regulation, particularly the requirement for 60% of stablecoin reserves to be held in cash deposits across multiple banks.
Crypto exchange Kraken is considering removing support for stablecoin Tether (USDT) in the European Union as the Markets in Crypto-Assets Regulation (MiCA) is set to take effect.
A Bloomberg report on May 17 indicated that Kraken is “actively reviewing” its plans to comply with the upcoming MiCA framework.
UPDATE: Kraken is reportedly reviewing the potential delisting of Tether (USDT) in Europe following the approval of the EU's MiCA regulation. Here are the details…↓#Kraken #Tether (By: @ComposableD)https://t.co/6YhfX7uKfu
— BSCN (@BSCNews) May 18, 2024
The regulation will be applied in two phases: rules applicable to stablecoins (asset-referenced tokens, or ARTs, and e-money tokens, or EMTs) will come into force on June 30, 2024, while rules for crypto service providers will take effect on Dec. 30, 2024.
“We’re absolutely planning for all eventualities, including situations where it’s just not tenable to list specific tokens such as USDT,” said Marcus Hughes, Kraken’s global head of regulatory strategy.
“It’s something that we’re actively reviewing, and as the position becomes clearer, we can take firm decisions on that.”
Kraken is “actively reviewing” plans that may include removing support for Tether, the world’s most-traded cryptocurrency, on its EU exchange https://t.co/bVU29G7WSy via @crypto
— 𝗕𝗮𝗻𝗸XRP (@BankXRP) May 17, 2024
In response to Kraken’s remarks, Tether reportedly said it expects exchanges to “rightfully focus on EUR liquidity for European customers, while maintaining USDT as an on-ramp off-ramp solution.”
While MiCA does not use the term “stablecoin,” ARTs and EMTs are both types of stablecoins that the European Banking Authority (EBA) may consider “significant” based on an established set of criteria.
For larger stablecoins, such as USDT, transactions are limited to 200 million euros per day.
Kraken is reviewing its Tether (USDT) listing in Europe due to new MiCA regulations. The exchange's final decision hinges on regulatory clarity, sparking questions about Tether's future.
— Coinpedia (@CoinpediaNews) May 18, 2024
– https://t.co/cxyGmRVCMH pic.twitter.com/O5KvkAJt46
Tether’s CEO, Paolo Ardoino, recently criticized the European regulation, saying the company does not intend to be regulated under MiCA.
Specifically, Ardoino mentioned a requirement that 60% of stablecoin reserves be in cash deposits across several banks.
“Very few banks accept this type of business in Europe. It’s already very difficult to get just one!” Ardoino noted in an interview.
Fellow crypto exchange OKX made a similar move in March, discontinuing support for USDT trading pairs in the European Economic Area to comply with the coming rules.
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