Kraken, a prominent cryptocurrency exchange, is considering removing Tether's USDT stablecoin from its European platform due to forthcoming regulations from the European Union.
Marcus Hughes, Kraken's global head of regulatory strategy, confirmed this possibility in a recent interview with Bloomberg.
The European Union is set to introduce a new regulatory framework for digital assets, known as the Markets in Crypto-Assets (MiCA), in July. This framework is expected to impose strict regulations on stablecoins, potentially affecting the status of USDT in the European market.
"We're preparing for all scenarios, including situations where it may not be feasible to list specific tokens like USDT," Hughes stated. He explained that Kraken is carefully evaluating the situation and will make definitive decisions as the regulatory landscape becomes clearer.
In response to Kraken's considerations, Tether, the issuer of USDT, emphasized its expectation that European exchanges will prioritize euro liquidity for their customers while potentially using USDT as a bridge currency for entering and exiting the crypto market.
Paolo Ardoino, Tether's CEO, has expressed concerns about certain aspects of MiCA's requirements. While Tether is in discussions with regulators, Ardoino has indicated that the company does not intend to comply with MiCA regulations immediately.
Earlier this year, another cryptocurrency exchange, OKX, adjusted its support for USDT within the EU. OKX users can still deposit, withdraw, and convert USDT to euros but can no longer trade other cryptocurrencies using USDT on the platform.
The European Banking Authority (EBA) is finalizing the technical specifications for MiCA, with full implementation expected by 2025. The new regulations will require stablecoin issuers to obtain licenses in at least one EU member state and adhere to stricter standards for governance and reserve management.
This impending regulatory change in the European Union highlights the evolving landscape for stablecoins and cryptocurrency exchanges. Kraken's potential delisting of USDT reflects the challenges posed by MiCA, while Tether's stance suggests a potential conflict between regulators and stablecoin issuers.
The coming months will be critical in determining how the European market adjusts to this new regulatory framework and its impact on the broader cryptocurrency ecosystem.
May 2024, Cryptoniteuae