Due to new regulations, leading crypto exchange Kraken is “actively reviewing” whether to remove Tether (USDT) from its European market. The Markets in Crypto Assets (MiCA) regulations are set to be implemented across Europe, potentially creating compliance challenges for stablecoins like Tether.
Marcus Hughes, Kraken’s Global Head of Regulatory Strategy, revealed that the exchange is preparing for multiple scenarios, delisting USDT as one option. However, the final decision will only be made when the regulatory situation becomes clearer.
MiCA Regulations and Market Impact
The European Banking Authorities approved the MiCA regulations in April 2023, imposing stringent requirements on stablecoins issued within the EU. These rules’ main aim is to ensure financial stability and consumer protection, but they also pose significant compliance challenges for stablecoin issuers. The phased implementation of MiCA will see some rules enforced by mid-2024, with full implementation by December 2024. OKX has already delisted Tether trading pairs in Europe, and Kraken might follow suit.
Kraken’s Commitment to Compliance
Kraken is committed to adhering to global regulatory standards and promoting cryptocurrency adoption. A spokesperson reassured that there are no immediate plans to delist Tether or alter USDT trading pairs. The company continuously evaluates its operations to ensure compliance and operational efficiency, highlighting Kraken’s dedication to aligning with regulations and maintaining a secure trading environment.
Tether’s Discussions with Regulators
Tether, the issuer of USDT, is currently in serious discussions with European regulators about the proposed MiCA rules. Paolo Ardoino, CEO of Tether, has expressed concerns about the risks associated with the new regulatory framework, particularly the mandate for stablecoins to hold reserves in uninsured cash deposits. He argued that 100% of their reserves should be kept in treasury bills to avoid exposure to bank failures, citing Silicon Valley Bank’s collapse as a cautionary example. Tether remains hopeful about continuing its discussions with EU regulators on these critical issues.
Kraken’s Future Plans
Kraken aims to navigate the evolving crypto regulations by reviewing its support for Tether and staying engaged in regulatory developments. The exchange pledges to maintain its commitment to innovation and compliance while exploring the changing regulatory landscape.
Also Read How the laws & regulations affecting blockchain technology and cryptocurrencies, like Bitcoin, can impact its adoption.
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