Kraken, the cryptocurrency exchange that has been operating for over a decade, is reportedly reviewing its development plans in response to the European Union’s Markets in Crypto-assets Regulation (MiCA). One of the potential changes being considered is the removal of support for the largest stablecoin, USDT. However, a senior executive at Kraken clarified that there are currently no plans to delist the USDT trading pair.
MiCA, which focuses on regulations for stablecoins, is set to come into effect no earlier than July 2024. The regulation stipulates that only Electronic Money Institutions (EMIs) and credit institutions will be allowed to issue stablecoins.
Marcus Hughes, Kraken’s Global Head of Regulatory Strategy, told Bloomberg that the new regulations will reduce the number and variety of stablecoins available in Europe, depending on which companies comply with the EU’s system. He added that Kraken is preparing for all possible scenarios, including the potential inability to continue listing tokens like USDT. However, the company will make a definitive decision once the regulatory landscape becomes clearer.
On the other hand, Mark Greenberg, Kraken’s Head of Asset Growth and Management, recently clarified on the X platform that Kraken plans to continue listing USDT in Europe and currently has no plans to delist it. He stated that they understand the importance of USDT to European customers and will continue to consider all options related to providing USDT under the new regulations. Greenberg emphasized that Kraken will comply with all legal requirements, even if they are dissatisfied with certain regulations. However, since the rules have not been finalized, they will make every effort to offer relevant stablecoins to their European customers.
Tether, the issuer of USDT, expects that exchanges will retain USDT trading pairs for European customers as a solution for fund transfers, according to a spokesperson. The spokesperson also expressed 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, Tether’s CEO, Paolo Ardoino, revealed that Tether does not currently have plans to comply with the MiCA regulations in the near future.
MiCA regulations require issuers of stablecoins to comply with the existing EU Electronic Money Directive. Starting from July 2024, issuers will need to maintain sufficient reserves to meet large withdrawal requests, and larger stablecoins will need to set transaction limits.
Many cryptocurrency exchanges have already made adjustments due to the MiCA regulations. For example, OKX delisted Tether’s USDT for EU users in March but continues to support Circle’s USDC, a stablecoin issuer that prioritizes regulatory compliance. Circle 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 to operate legally in France.
Furthermore, Marina Parthuisot, the Legal Director of Binance France, previously stated in September 2023 that they plan to delist stablecoins from the European market by June 2024. However, at the time, Binance CEO Changpeng Zhao clarified on X that Parthuisot’s statement was taken out of context and that the company already has several partners who have launched compliant Euro and other stablecoins.
Source:
Bloomberg, CryptoSlate