Kraken plans to dump USDT in Europe ahead of new regulations

Crypto exchange Kraken is considering removing support for the stablecoin Tether (USDT) in the European Union so that markets under the Crypto-Assets Regulation (MiCA) can be implemented.

According to a Bloomberg report on May 17, Kraken is “actively reviewing” plans to comply with the upcoming MiCA framework. The regulation will be implemented in two phases: Stablecoins (asset-quoted, or ARTs, and e-money tokens, or EMTs) will be implemented on June 30, 2024, while the rules applicable to crypto service providers will apply. On December 30, 2024

We are absolutely planning for all eventualities, including situations where it is impossible to list specific tokens like USDT. It's something we're actively reviewing, and as the position becomes clearer, we can take firm decisions on it.

In response to Kraken's comments, Tether reportedly expects exchanges to “really focus on euro liquidity for European clients and keep USDT as an emergency exit solution.”

The MiCA regulation does not use the term “stablecoin”, but ARTs and EMTs are both types of stablecoins that the European Banking Authority (EBA) can consider “large” according to the criteria set. Transactions for larger Storicoins like USDT are limited to 200 million euros per day.

Tether CEO Paolo Arduino recently criticized European regulation, saying the company did not intend to be regulated under MiCA. In particular, Ardonio mentioned the requirement that 60% of Statcoin reserves must be in cash deposits in multiple banks.

“There are very few banks in Europe that accept this kind of business. It is already very difficult to find just one!” Arduino said in an interview. At the time of writing, USDT has a current market capitalization of $111.2 billion, with a global trading volume of $61.24 billion.

Another crypto exchange, OKX, took a similar step in March, to comply with upcoming rules that cut support for USDT trading pairs in the European Economic Area.

Magazine: 68% of Runes Are in the Red – Are They Really an Update for Bitcoin?