A significant development has rocked the cryptocurrency sector as US-based crypto exchange Kraken explores the possibility of discontinuing support for Tether‘s USDT in the European Union. This investigation happens as the EU prepares to implement the Markets in Crypto-Assets Regulation (MiCA) in July, potentially impacting USDT, the world’s most traded stablecoin, according to Bloomberg.
Will Kraken Drop USDT?
The European Banking Authority (EBA) has finalized MiCA, set to restrict the sale of stablecoins like USDT to EU investors. Investors often use stablecoins to transfer cryptocurrencies between exchanges or avoid price volatility. Marcus Hughes, Kraken’s global regulatory strategy head, mentioned they are considering all outcomes, including the potential delisting of USDT. Tether, the issuer of USDT, acknowledged Kraken’s stance, expecting exchanges to retain USDT as an option while focusing on EUR liquidity for European customers.
Previously, Tether’s CEO Paolo Ardoino had raised concerns regarding the necessity of MiCA. Tether currently has no plans to comply with the new regulations in the medium term.
Why is MiCA Necessary?
Kraken’s possible delisting of USDT mirrors a similar action by another major exchange, OKX, which had earlier banned EU users from using USDT for cryptocurrency transactions. Hughes pointed out that the regulatory landscape is constantly evolving, making it unlikely to offer the current range of stablecoins in Europe in the future.
This evolving regulatory environment suggests a forthcoming disruption where certain stablecoins may no longer be available.
Implications of MiCA Implementation
– Kraken may delist USDT in the EU, following MiCA implementation.
– Tether’s lack of regulatory plans under MiCA may affect its market presence.
– EU investors might face limitations in using stablecoins for trading.
– Other exchanges like OKX have already restricted USDT in the EU.
– The evolving regulatory landscape could lead to fewer stablecoins being available.
The potential delisting of USDT by Kraken in the EU could signal a major shift in the availability and use of stablecoins due to the impending MiCA regulations. As the situation unfolds, it remains critical to monitor how these changes will affect the broader cryptocurrency market, particularly in Europe.