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Kraken Contemplates EU Support for Tether’s USDT Stablecoin
Kraken is reportedly considering dropping support for Tether’s USDT stablecoin in the European Union, as per a report by Bloomberg. The move comes in light of impending regulatory changes in the region, particularly the EU’s Markets in Crypto-Assets (MiCA) guidance set to take effect in July.
Kraken Global Head of Regulatory Strategy, Marcus Hughes, stated that the company is preparing for scenarios where it may no longer be feasible to list certain tokens like USDT. MiCA mandates that companies issuing fiat-backed stablecoins, including Tether, register as electronic money institutions (EMIs) and adhere to certain regulatory requirements.
With the introduction of new regulations, Hughes mentioned that Europe may witness a reduction in the availability of stablecoins, depending on which entities comply with the EU’s framework. Nonetheless, Kraken has not explicitly announced any plans to delist Tether or make changes to its USDT trading pairs at the moment.
EU Regulatory Landscape Concerns
In response to the upcoming regulations, Tether emphasized its expectations for exchanges to continue supporting USDT as a payment gateway for European users, offering liquidity against the Euro. Paolo Ardoino, Tether’s Chief Technology Officer, expressed reservations about MiCA’s stringent requirements around reserve management and clarified that the company currently has no intentions to seek regulatory approval within the EU.
Notably, other cryptocurrency exchanges have taken similar measures to comply with MiCA ahead of its implementation. OKX, for instance, ceased offering Tether to EU customers in March, although it did not explicitly attribute the decision to the impending regulations. Instead, OKX opted to bolster support for Circle’s USDC stablecoin.
Moreover, Binance France’s Legal Head, Marina Parthuisot, previously hinted at the possibility of delisting all stablecoins in Europe by June 30, as stated in September 2023. However, Binance’s CEO, Changpeng Zhao, later clarified that the remarks were misconstrued and affirmed the platform’s commitment to collaborating with compliant stablecoin issuers.
In light of regulatory shifts and evolving compliance standards, cryptocurrency exchanges like Kraken are strategically reassessing their operations to align with the changing regulatory landscape in the European Union.
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