Kraken Considering Removing Support for USDT Due to EU Crypto Law MiCA
According to a recent report by Bloomberg, Kraken, a cryptocurrency exchange that has been operating for over a decade, is actively reviewing its development plans in light of 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, Kraken’s Global Head of Regulatory Strategy, told Bloomberg that the new regulation will reduce the number and types of stablecoins available in Europe, depending on which companies comply with the EU’s system.
“We are, of course, preparing for all possible scenarios, including the inability to continue listing tokens like USDT,” Hughes added. He emphasized that this is something Kraken is actively reviewing, and the company will be able to make a definitive decision as regulations and the overall situation become clearer.
However, Mark Greenberg, Kraken’s Head of Asset Growth and Management Business, recently clarified on X platform that Kraken will continue to list USDT in Europe and currently has no plans to delist it.
“We understand that European customers value the use of USDT, and we will continue to consider all options related to offering USDT under the new regime. Even if we have some reservations about certain regulations, we will comply with all legal requirements. However, these rules have not been finalized, and we will continue to make every effort to provide all relevant stablecoins to our European customers,” Greenberg wrote.
Concerns About MiCA
Tether, the issuer of USDT, stated in an interview with Bloomberg that it expects exchanges to retain USDT trading pairs for European customers as a solution for inflows and outflows of funds.
A Tether spokesperson also expressed concern about the MiCA regulation and stated that Tether will continue to engage in dialogue with regulatory authorities. In an interview with The Big Whale in April, Paolo Ardoino, Tether’s CEO, revealed that Tether has no plans to be regulated by MiCA in the near future.
MiCA regulations stipulate that issuers of stablecoins must comply with existing EU electronic money directives. Starting from July 2024, issuers will need to maintain adequate reserves to meet requests for large-scale withdrawals, and larger stablecoins will also need to set transaction limits.
In fact, many cryptocurrency exchanges have taken measures to adjust due to the MiCA regulation. For example, OKX delisted Tether’s USDT for EU users in March but continued to support USDC from Circle, a stablecoin issuer that prioritizes compliance. In March this year, Circle applied for licenses as an electronic money institution and a digital asset service provider from the French Prudential Supervisory Authority and the French Financial Markets Authority in order to operate legally in France.
Additionally, Marina Parthuisot, the Legal Director of Binance France, stated in September 2023 that they plan to delist stablecoins from the European market by June 2024. At that time, Binance CEO Changpeng Zhao (CZ) clarified on X that Parthuisot’s statement was taken out of context and that the company has already partnered with several entities to launch fully compliant stablecoins, including the Euro.
Source:
Bloomberg
CryptoSlate
