Kraken is actively reviewing its plans to potentially remove support for Tether’s USDT on its platform in the European Union (EU).
According to Bloomberg, this move comes in response to the impending implementation of the Markets in Crypto-Assets (MiCA) regulatory framework, set to take effect in July.
Key points:
- Kraken is considering dropping support for USDT in the EU due to upcoming MiCA regulations.
- MiCA rules, yet to be finalized by the European Banking Authority (EBA), will place restrictions on stablecoins offered to EU investors.
- Tether expects exchanges to focus on EUR liquidity for European customers while maintaining USDT as an on-ramp, off-ramp solution.
- OKX Exchange has already altered trading support for USDT in the EU earlier this year.
- Kraken is in the advanced stages of selecting its post-MiCA European headquarters, with France and Ireland as potential destinations.
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Marcus Hughes, Kraken’s global head of regulatory strategy, stated in an interview that the exchange is planning for all eventualities. This includes situations where it may not be feasible to list specific tokens, like USDT. He emphasized that the decision will be based on the clarity of the regulatory position and the exchange’s ongoing review process.
In response to Kraken’s remarks, Tether expressed its expectation for exchanges to focus on EUR liquidity for European customers while maintaining USDT as an on-ramp, off-ramp solution.
The stablecoin issuer also highlighted its CEO Paolo Ardoino’s concerns regarding certain aspects of MiCA’s requirements and the company’s ongoing dialog with regulators. Tether clarified that it has no plans to be regulated under MiCA rules in the medium term.
The potential impact of MiCA on stablecoins is already evident, with OKX, another crypto exchange, having altered its trading support for USDT in the EU earlier this year.
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European users on OKX can no longer use the stablecoin for buying or selling other crypto. However, they can still deposit, withdraw, conduct over-the-counter transactions, and exchange USDT for euros.
Stablecoin issuers will need to apply for a license from a national financial authority in at least one member state by June 30 in order to participate in the MiCA program. This is once European regulators approve the technical guidelines, which are anticipated to be fully implemented by early 2025.
