Keep USDT and 5 stablecoins listed until July 1st, citing MCA
Cryptocurrency exchange Uphold has sent a notice to its European users that it will end support for six popular stablecoins as of July 1st.
The six stablecoins are Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD). Users who hold these stablecoins must convert to a different cryptocurrency before June 28, after which the cryptocurrency exchange will convert them to USD Coin (USDC).
The MCA was enacted into law in May 2023 and partially entered into force in June 2023. The broader EU crypto rules are expected to be fully implemented by the end of 2024.
New stable coin structure under MiCA
On June 30, MiCA's stablecoin regulations will be implemented in the European Economic Area. Crypto exchanges like Uphold and others are making key changes to their market listings to comply with these regulations.
As determined by a set of seven quantitative and qualitative indicators, the MCA will impose additional and stricter regulatory requirements on fiat-backed stablecoins and e-money tokens that exceed a predetermined adoption threshold. This puts EU member states in control of the tokens, not national authorities.
In addition to requiring fiat-backed stablecoins to be backed by a 1:1 ratio of liquid reserves and requiring issuers to create and maintain assets held in third-party custody separate from other assets, the law strictly prohibits algorithmic Storicoin funds. These safeguards are intended to increase user confidence in digital currencies by ensuring that stable coins can be used as a store of value and securely for payments.
Related: EU publishes draft rules for stablecoin issuer complaint procedures
Therefore, stablecoin issuers in the EU, such as credit institutions or electronic money institutions, must hold licenses within the MiCA framework. While some stablecoins face uncertainty, euro-backed stablecoins may prosper under the new rules.
Crypto exchanges evaluate a stable coin policy
In addition to Uphold, other major crypto exchanges, including Binance, adjusted their stablecoin listing policies in early June to comply with MiCA regulations.
In line with the new rules, Binance has split stablecoins into “syndicated” and unsyndicated coins. However, unlike Uphold, Binance has yet to decide which crypto stablecoins are eligible under the regulation and which are not. In March, Okex canceled Tether in Europe without mentioning MCA, while Kraken plans to continue supporting USDT in the region.
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