The EU regulations are still being finalized, but they are expected to significantly reduce the number of stablecoins offered in Europe.
Major crypto exchange Kraken is considering delisting Tether (USDT) from its European Union (EU) platform to comply with the upcoming Markets in Crypto-Assets (MiCA) regulations, according to a recent report from Bloomberg.
The EU is setting MiCA regulations for crypto trading, specifically targeting stablecoins like Tether’s USDT. These rules will be enforced starting in July and will likely restrict how these stablecoins are offered in the EU.
In a Thursday interview, Marcus Hughes, Kraken’s global head of regulatory strategy, said they are waiting for clearer guidance on the rules before making a final decision.
“We’re absolutely planning for all eventualities, including situations where it’s just not tenable to list specific tokens such as USDT. It’s something that we’re actively reviewing, and as the position becomes clearer, we can take firm decisions on that,” Hughes stated.
In response to Kraken’s considerations, Tether emphasized the importance of focusing on Euro liquidity for European customers while maintaining USDT as a transaction gateway.
Paolo Ardoino, Tether’s CEO, has also voiced concerns about certain MiCA requirements and indicated that Tether will continue engaging with regulators. However, the company does not intend to be regulated under MiCA in the medium term.
The MiCA regulations aim to establish a licensing system for stablecoin issuers and impose stricter corporate governance and reserve management requirements.
Kraken anticipates that under MiCA, many stablecoins currently available in the EU will likely be delisted.
“It’s an evolving picture. What we’re clear on is that the scope of the type and number of stablecoins that are offered today in Europe are unlikely to be able to be offered going forward,” Hughes added. “At some point in the future, there’ll be a cut off at which that won’t be possible. A lot of that will depend on which assets are being properly registered within the European Union under the e-money regime.”
As the European Banking Authority finalizes the technical standards for MiCA, exchanges like Kraken are preparing for a future in which the current range of stablecoins may not be sustainable in Europe.
OKX, another major crypto exchange, already limited USDT functionality in the EU earlier this year.
