Kraken is considering removing the US dollar-pegged stablecoin USDT from its platform in the European Union due to new digital asset regulations effective July 2024.
It’s possible that the Kraken trading platform will remove the US dollar-pegged stablecoin USDT when the new digital asset regime goes into effect in July.
The most prominent cryptocurrency exchange is reportedly considering the possibility of removing the stablecoin from its platform in the European Union, according to reports.
During an interview on Thursday, Marcus Hughes, the global head of regulatory strategy at Kraken, agreed with the statement that the decision is currently under evaluation.
The European Union demonstrated its dedication to the digital asset sector within its regulatory sphere by implementing a cryptocurrency regulatory framework known as Market in Capital Assets (MiCA).
We anticipate implementing this regulation in July 2024, close to the summer season, after considering it for a considerable amount of time.Investors typically use stablecoins to transfer digital assets from one specific exchange to another.
The European Banking Authority (EBA) will monitor these stablecoins, which means the MiCA imposes some limitations on the investment opportunities available to investors.
The European Banking Authority (EBA) and the European Securities and Markets Authority (ESMA), which is the market regulator for the European Union, have been working together to develop further regulations for stablecoins in the form of Regulatory Technical Standards (RTSs).
The disastrous failure of Terra Luna’s UST in 2022 has significantly increased the amount of work required to regulate stablecoins.In reaction to the scenario, Tether stated that it anticipates exchanges to “rightfully focus on EUR liquidity for European customers while maintaining USDT as an on-ramp, off-ramp solution.”
This is the expectation that Tether has for exchanges. Furthermore, the USDT issuer brought attention to the fact that its Chief Executive Officer, Paolo Ardoino, had previously voiced his reservations regarding particular components of the MiCA rule and the restrictions that it imposes.
Despite Tether’s dedication to reaching a consensus with regulators in various jurisdictions, Ardoino added that the company does not intend to operate under MiCA’s framework at this time.
Exchanges such as OKX have already begun the process of removing USDT from their platform in Europe, ahead of Kraken, in order to get ready for the adoption of MiCA. The MiCA law will not go into force until 2025, which is notable.