2024-03-19 06:50:28 ET
OKX users in the European Union and the European Economic Area (EEA) will no longer access trading pairs with the Tether USDT stablecoin.
A message shared on X shows an email where the exchange attributes the decision to regulatory requirements. OKX said that the changes were necessary to remain compliant and uphold security on the platform.
“Moving forward, only EUR and USDC trading pairs will be accessible for spot trading,” the message read.
OKX wants to improve liquidity for Euro pairs
Despite the message shared on X showing regulatory compliance as the basis of the decision to halt USDT trading pairs, OKX has attributed the move to a need to boost EURO pair liquidity.
While speaking to CoinDesk, a spokesperson from the exchange said OKX had become a hub for EURO to crypto spot trading. Therefore, it wanted to boost liquidity for EURO trading pairs as only a small number of users used USDT pairs.
The spokesperson further said that OKX has expanded its product offering across the EEA region by launching multiple Euro fiat onramps and EURO trading pairs.
The affected users can only make USDT deposits and withdrawals. They can also buy, sell, or convert USDT using over-the-counter (OTC) trading.
Tether (USDT) is currently the third-largest cryptocurrency with a market capitalization of over $103 billion. It is also the largest and the most liquid stablecoin. In comparison, the second-largest stablecoin, USD Coin (USDC), has a market cap of $31 billion.
While Tether’s USD-pegged stablecoin is highly liquid, the same cannot be said for the firm’s EURO-pegged stablecoin, EUR Tether (EURT). On January 29, a Kaiko research
noted
that the stablecoin has failed to keep up with Circle’s EUR Coin (EURC), with the latter enjoying increased demand.
Mica framework heightens regulatory scrutiny on stablecoins
OKX’s decision to delist USDT comes months before the implementation of the Markets in Crypto Assets (MiCA) framework that will go into effect in December this year. This framework will halt the use of some stablecoins in the EU region. It will also establish a clear regulatory framework for cryptocurrency issuers, users, and service providers.
The need to regulate stablecoin became crucial after the collapse of the Terra UST stablecoin. UST’s collapse led to billions of dollars in investor losses, prompting regulators to turn their attention toward stablecoin issuers.
Last week, EU financial regulators proposed additional guidelines for regulating stablecoins under the MiCA framework. They published draft regulatory standards on how stablecoin issuers should deal with complaints.
The draft guidelines outline the processes that stablecoin issuers should follow to manage complaints effectively. According to the European Banking Authority (EBA), the MiCA framework will promote innovation and fair competition. It will also protect retail traders and promote the integrity of crypto markets.
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OKX delists USDT trading pairs for EU users as MICA implementation nears
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