Regulation
End of stablecoins? Why exchanges are abandoning stablecoins in the EU
Crypto Asset Markets Regulation (MiCA) is about to be implemented, and digital asset exchanges are preparing to comply.
The requirements of the new law aim to protect investors, prevent financial crime and ensure transparency. How are cryptocurrency exchanges reconsidering options for European traders in light of recent events?
What is known about MiCA
The European regulation on stablecoins will come into force on June 30, while the European Banking Authority (EBA) and the European Securities Market Authority (ESMA) are consulting on the implementation of the new rules.
Not requires stablecoin issuers to be registered within the EU. However, the question of how the law will apply to decentralized and foreign issuers remains unresolved. EBA representatives stressed that there will be no grace period for stablecoins that are already entering the market.
How MiCA classifies stablecoins
Only a small portion of European institutional funds have access to cryptocurrency, mainly due to regulatory uncertainty. However, the emergence of Not It is likely to alleviate these concerns by encouraging major EU banks to offer services such as custody, trading and issuance of electronic money tokens or stablecoins.
MiCA also requires stablecoin issuers to maintain sufficient reserves. According to EBA President José Manuel Campa, the agency will pay particular attention to the diversification of these funds. Operators must, among other things, eliminate conflicts of interest and make the connection of storage facilities with trading platforms visible.
Which cryptocurrency exchanges are abandoning stablecoins in Europe
Support
Starting July 1st Support will stop supporting USDT, COME ONFRAX, GUSD, USDP and TUSD for European Economic Area (EEA) users to comply with MiCA requirements.
Holders of stablecoins will have to convert them into other assets by June 28th. Otherwise, the excluded cryptocurrencies will be automatically replaced with USD Coin (USDC). The platform will also continue to support Circle’s EURC and PYUSD PayPal.
Binance
Binance announced that it will restrict access to unauthorized stablecoins for users in the EEA starting June 30th. This is due to the provisions of Not legislation regarding this category of goods.
Under the upcoming MiCA rules, some stablecoins will be restricted as unauthorized stablecoins.
Binance will not delist any unauthorized stablecoins, but will limit their availability to EEA users only on certain products, such as launchpool and Earn, and will offer…
— Binance (@binance) June 3, 2024
The remaining resources in this category will fall into the unauthorized section. Binance has admitted that some of the existing stablecoins may receive this status.
According to the official statement, the exchange is introducing a phased plan for the transition to regulated assets. Specifically, the platform will restrict access to unauthorized stablecoins across all of its products for EEA customers starting June 30.
Furthermore, restrictions will apply to the copy trading service. Users are advised to close positions and withdraw funds before June 29th. Additionally, EEA traders will no longer have access to the FDUSD pool.
Kraken
Bloomberg recently reported That Kraken would stop supporting USDT in Europe in May. Journalists note that the exchange’s decision may be related to the adoption of European rules for regulating the cryptocurrency sector.
In response to the plans of the Kraken cryptocurrency platform, representatives of Bindthe USDT issuer, said it wants exchanges to maintain a stablecoin for withdrawing funds and deposits.
The company also recalled that its CEO, Paolo Ardoino, had previously expressed concerns about some aspects of MiCA’s requirements and said that Tether will continue to cooperate with European Union regulators.
However, Patrick Sutton, head of communications at Kraken, later denied Bloomberg’s statement in a comment to crypto.news.
“There are no plans to delist Tether or change our USDT trading pairs. As a leading cryptocurrency exchange, we are constantly evaluating our global strategy and operations to ensure we remain compliant now and in the future. We are committed to follow the rules as we continue our mission to accelerate the adoption of this asset class.”
Patrick Sutton, communications manager at Kraken
The company’s head of growth and wealth management, Mark Greenberg, also said that Kraken will continue to serve payments and pairs trading with USDT stablecoins in Europe.
Let’s be clear: @krakenfx continues to list USDT in Europe and we have no plans to delist it at this time.
We know that our European customers value access to USDT and we continue to explore all options for offering USDT under the next regime.
Obviously we will follow all legal regulations…
— Mark Greenberg (@marklg) May 18, 2024
Greenberg noted that Kraken will follow all legal requirements. But since the rules have yet to be approved, the company is doing its best to offer the popular stablecoins to European customers, he said.
OKX
From March 14th OKX cryptocurrency exchange has deprived European users trading pairs with the USDT stablecoin.
OKX’s decision is likely due to the fact that MiCA includes a clause for mandatory licensing for stablecoin operators. The cryptocurrency exchange does not have such permission. Therefore, his team decided to be proactive to avoid falling under regulatory pressure.
As an alternative to the first and most popular Tether stablecoin, the OKX team offered it to European users USDCan eternal competitor of USDT.
What will change in Europe with MiCA
For cryptocurrency investors, MiCA offers welcome regulatory insights that can shape the trajectory of digital asset regulation.
MiCA aims to bring clarity to one of the world’s largest markets, making the EU an even more attractive place web3 companies to innovate and attract talent. Regulatory clarity drives innovation and market competitiveness, providing the confidence and certainty that both investors and businesses need.