In response to the upcoming Markets in Crypto-Assets (MiCA) regulations, Kraken, a major cryptocurrency exchange, is considering removing Tether (USDT) from its platform in the European Union. This move is in line with Kraken’s efforts to comply with the strict regulatory framework set to be implemented in July 2024.
MiCA aims to bring stability and transparency to the EU’s crypto market, with a specific focus on stablecoins like USDT. These regulations will require stablecoin issuers to register as electronic money institutions (EMIs) and adhere to rigorous corporate governance and reserve management standards.
Marcus Hughes, Kraken’s global head of regulatory strategy, emphasized the exchange’s proactive stance during a recent interview.
“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.”, Marcus Hughes said.
In response to Kraken’s considerations, Tether has emphasized the importance of maintaining Euro liquidity for its European customers while keeping USDT as a key transaction gateway. Paolo Ardoino, Tether’s CEO, expressed concerns about certain MiCA requirements but confirmed that Tether will continue to engage with regulators. However, he indicated that the company does not intend to seek regulatory approval under MiCA in the medium term.
Kraken’s potential delisting of USDT highlights the broader impact of MiCA on the availability of stablecoins within the EU.
Hughes noted, “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.”
Despite these considerations, a Kraken spokesperson later clarified that there are no immediate plans to delist USDT or alter its USDT trading pairs.
“As a leading crypto exchange, we are constantly evaluating our global strategy and operations to ensure that we remain compliant both now and in the future,” the spokesperson said. “We are committed to following the rules as we continue our mission of accelerating the adoption of this asset class.”
Kraken’s stance reflects a broader industry trend as exchanges prepare for the full implementation of MiCA. Earlier this year, OKX, another prominent exchange, limited USDT functionality for EU users in anticipation of the regulatory changes. Similarly, Binance France hinted at the possibility of delisting all stablecoins in Europe but later clarified its position, indicating a preference for partnerships with compliant stablecoin issuers.
As the European Banking Authority finalizes the technical standards for MiCA, the landscape for stablecoins in the EU is set for significant transformation. Kraken and other exchanges are preparing for a future where the current diversity of stablecoins may no longer be sustainable under the new regulatory regime.
The full impact of MiCA will become clearer as the regulations come into force and firms adjust their strategies to meet compliance requirements. For now, Kraken’s careful planning and ongoing evaluations reflect the exchange’s commitment to navigating the evolving regulatory environment while continuing to support its user base.
