July 24, 2024
Stablecoins
Latest Cryptocurrency News

MiCA Forces Uphold to End Support for Popular Stablecoins

Notice to European Users

Cryptocurrency exchange Uphold has informed its European users that it will stop supporting six popular stablecoins starting July 1. This decision aligns with the European Union’s Markets in Crypto-Assets Regulation (MiCA). The affected stablecoins are Tether, Dai, Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD).

Users need to convert these stablecoins to another cryptocurrency by June 28. After this date, Uphold will automatically convert them into USD Coin. MiCA, enacted in May 2023, began partial implementation in June 2023 and will be fully in force by the end of 2024.

MiCA’s New Stablecoin Framework

Starting June 30, MiCA’s stablecoin regulations will apply across the European Economic Area. Crypto exchanges like Uphold are adjusting their listings to meet these new rules. MiCA introduces stricter requirements for fiat-backed stablecoins and e-money tokens that meet certain criteria. This regulation transfers oversight from national authorities of EU member states to the European Banking Authority.

MiCA requires fiat-backed stablecoins to maintain a 1:1 liquid reserve ratio and to hold reserves with a third party, separate from other assets. The regulation also bans algorithmic stablecoins. These measures aim to increase consumer trust in digital currencies by ensuring stablecoins are reliable for storing value and making payments. Under MiCA, stablecoin issuers in the EU must be licensed as credit institutions or electronic money institutions. While some stablecoins face uncertainty, those backed by the euro might benefit under the new regulations.

Other Crypto Exchanges Adjust Policies

Uphold is not the only exchange revising its stablecoin policies. Major exchanges like Binance have also changed their listings to comply with MiCA. Binance has divided its stablecoins into “regulated” and “unauthorized” groups but has not finalized which coins belong to each group. In March, OKX delisted Tether in Europe without mentioning MiCA, and Kraken is still deciding whether to continue supporting USDT in the region.

Conclusion

The implementation of MiCA represents a major change in cryptocurrency regulation in Europe. By delisting certain stablecoins, Uphold and other exchanges are ensuring compliance with the new rules and enhancing consumer protection. As MiCA takes full effect, the EU cryptocurrency market is expected to evolve, potentially offering more stability and confidence to users.

Image by rorozoa on 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.

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