June 5, 2024
Kraken considers dropping USDT in Europe
Policy & Regulation

Kraken Mulls USDT Removal in Europe Amid Regulatory Overhaul

Kraken Contemplates Dropping USDT in Europe Amid Regulatory Shifts

As Europe braces for the implementation of the Markets in Crypto-Assets Regulation (MiCA), cryptocurrency giant Kraken is deliberating over the possibility of discontinuing support for the stablecoin Tether (USDT) within the region. MiCA, set to roll out in two phases, presents a formidable challenge for crypto service providers like Kraken.

Navigating MiCA Implementation: Kraken’s Response

According to a recent Bloomberg report, Kraken is actively strategizing to align with the forthcoming MiCA framework. Scheduled for phased implementation, MiCA will first enforce regulations concerning stablecoins like asset-referenced tokens (ARTs) and e-money tokens (EMTs) starting June 30, 2024. Subsequently, regulations targeting crypto service providers are earmarked for enforcement by December 30, 2024. Kraken’s proactive stance underscores its preparedness to address regulatory complexities. A spokesperson for the exchange affirmed, “We’re absolutely planning for all eventualities, including situations where it’s just not tenable to list specific tokens such as USDT.”

Tether’s Response and MiCA Critique

Tether, as the issuer of USDT, has voiced its expectation for exchanges to prioritize Euro (EUR) liquidity for European clientele, while advocating for USDT to retain its role as a pivotal on-ramp and off-ramp solution. Paolo Ardoino, Tether’s CEO, has critiqued certain facets of the MiCA regulation, particularly spotlighting a stipulation mandating that 60% of stablecoin reserves be held in cash deposits across multiple banks. “Very few banks accept this type of business in Europe. It’s already very difficult to get just one!” Ardoino stressed in an interview, emphasizing the hurdles posed by regulatory requisites.

Market Dynamics and Prior Moves by Exchanges

USDT, boasting a market capitalization of $111.2 billion and a global trading volume of $61.24 billion, ranks among the largest stablecoins in the cryptocurrency sphere. Notably, OKX, another leading crypto exchange, took a similar stride in March, ceasing support for USDT trading pairs in the European Economic Area to ensure alignment with forthcoming regulations.

Adapting to Evolving Regulations

As regulatory landscapes evolve, cryptocurrency exchanges like Kraken confront the challenge of aligning with regulatory frameworks while upholding operational integrity. The ongoing discussions regarding the potential removal of USDT from Kraken’s offerings underscore the substantial impact of regulatory shifts on Europe’s cryptocurrency ecosystem. With MiCA’s phased implementation drawing closer, stakeholders remain vigilant, adjusting strategies to ensure compliance and sustain market functionality.

Image by freepik

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

Related posts

How to Avoid Common Crypto Scams and Hacks 

Henry Clarke

China’s Crypto Legal Landscape: Second Court Ruling Highlights Ambiguities

Christian Green

BitGo Grabs Preliminary Approval for Singapore MPI

Harper Hall

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Please enter CoinGecko Free Api Key to get this plugin works.