18 May Crypto News – Kraken Might Delist USDT in Europe Following MiCA Implementation

Kraken Might Delist USDT in Europe Over MiCA Rule Changes

Crypto News- As Bloomberg reported on May 17, Kraken, a major player in the cryptocurrency exchange realm, is evaluating the feasibility of ending its backing for Tether’s USDT stablecoin within the European Union. This strategic reassessment comes in light of the impending implementation of the Markets in Crypto-Assets (MiCA) guidance by the EU, slated for July.

Kraken’s Regulatory Response: Planning for Change

Marcus Hughes, Kraken’s Global Head of Regulatory Strategy, indicated that the company is proactively strategizing for scenarios where listing tokens like USDT might no longer be viable under the evolving regulatory framework. The essence of this approach is to ensure compliance with the forthcoming MiCA regulations.

EU’s Regulatory Overhaul: Implications for Stablecoins

MiCA’s regulatory overhaul will mandate that companies issuing fiat-backed stablecoins, such as Tether, register as electronic money institutions (EMIs) and fulfill additional regulatory requisites. Hughes highlighted the expected repercussions, emphasizing that these new regulations are likely to streamline the variety of stablecoins available in Europe based on regulatory adherence by different firms.

Conflicting Signals: Kraken’s Mixed Messaging

Despite initial reports suggesting a potential delisting of USDT, a statement from a Kraken spokesperson, as reported by The Block, clarified that the company currently has no concrete plans to remove Tether or modify its USDT trading pairs. This discrepancy underscores the complexity of regulatory compliance and strategic decision-making in the cryptocurrency landscape.

Tether’s Response and Concerns

Tether responded to regulatory concerns by expressing its expectation that exchanges would continue to facilitate USDT transactions as a crucial entry and exit point for European customers, while also ensuring liquidity in EUR. However, Paolo Ardoino, Tether’s Chief Technology Officer, voiced reservations about MiCA’s stringent regulations around reserve management and indicated a reluctance to seek regulatory approval in the EU at present.

Industry Trends: Preemptive Measures Ahead of MiCA

Kraken’s deliberations align with similar preemptive measures taken by other cryptocurrency exchanges in anticipation of MiCA. For instance, OKX ceased support for Tether among EU users in March, while reaffirming its commitment to Circle’s USDC stablecoin.

Clarifications and Controversies: Binance’s Experience

The situation mirrors controversies seen previously, such as Binance France’s legal head Marina Parthuisot’s suggestion in September 2023 of delisting all stablecoins in Europe by June 30. However, Binance’s then-CEO, Changpeng Zhao, later clarified that the statement was taken out of context, emphasizing the company’s collaboration with compliant stablecoin issuers.

FAQs

For the latest in crypto updates, keep tabs on Crypto Data Space.