Cryptocurrency exchange Kraken is “actively reviewing” whether to delist the stablecoin Tether (USDT) from its European platform, according to a report by Bloomberg.
The decision precedes the European Union’s (EU) adoption of the Markets in Crypto-Assets (MiCA) regulation, set to fully come into effect on December 30, 2024. MiCA will introduce tighter controls on the usage of certain stablecoins within the region.
Marcus Hughes, Kraken’s Global Head of Regulatory Strategy, told Bloomberg that the exchange is preparing for various scenarios, including discontinuing support for certain tokens such as USDT. “It’s something we’re actively reviewing,” Hughes said, noting that a final decision will be made once the regulatory position becomes clearer.
Kraken’s consideration follows the actions of another major crypto exchange, OKX, which removed Tether trading pairs in Europe in March due to impending stablecoin regulations. An OKX spokesperson explained that the delisting will enable the exchange to introduce euro on-ramps for EEA-based customers. He added that this adjustment impacts only a minor portion of the exchange’s user base. In addition to phasing out USDT pairs,
MiCA mandates that stablecoins issued in Europe must meet heightened regulatory requirements. The implementation of MiCA will occur in phases, with certain applications set for mid-2024 and additional rules to be enforced by December 2024.
Tether holds a major portion of the market, with $116.76 billion worth, representing 69.6% of the total $167.78 billion USD-pegged stablecoin supply.
Under MiCA, stablecoins are categorized either as ‘e-money tokens’ (EMTs), if pegged to a fiat currency, or ‘asset-referenced tokens’ (ARTs) for other types of backing. The regulation introduces scaling constraints based on usage. Specifically, stablecoins not pegged to an EU currency will be banned from exceeding 1 million transactions per day. Additionally, the rules cover Terra-style algorithmic stablecoins, which rely on automated coding to maintain value.
