Regulation
Kraken may withdraw USDT in Europe for this reason!
5.30pm ▪ 3 minute read ▪ by Eddy S.
The cryptocurrency sector is experiencing explosive growth, attracting more and more investors. However, regulation is needed, which is why the EU MiCA legal framework will come into force from 2024. Faced with these new rules, Kraken is seriously considering withdrawing the stablecoin Tether (USDT) from its European offerings.
Kraken, the leader in cryptocurrency compliance
Waiting for the new one MiCA RegulationKraken recently revealed that it is seriously considering withdrawing the Tether (USDT) stablecoin from its European offerings. Far from being a trivial decision, this important change illustrates the platform’s determined willingness to proactively address future regulatory obligations.
“We are absolutely preparing for every eventuality,” underlined a spokesperson, highlighting a pragmatic and proactive approach, far from the defensive positions of some crypto actors who question the legitimacy of MiCA.
An important challenge for stablecoins
At the heart of Kraken’s concerns: MiCA’s stringent new rules aimed specifically at stablecoins deemed “significant” by European regulators. This is especially true in the case of the USDT token issued by Tether, which has a market capitalization of more than $80 billion. For these important stablecoins, the European text provides for a rigid limit on daily transactions of 200 million euros. A restrictive framework that could seriously hinder its widespread use as an access point to cryptocurrencies.
But that is not all! The new regulation would also require issuers to hold at least 60% of their reserves in the form of traditional bank deposits. A complex obligation according to Paolo Ardoino, head of Tether, who highlights the difficulty finding available banks accept this type of cryptographic activity.
Beyond the specific case of Kraken, this wave of regulatory adjustments in the crypto ecosystem seems far from being a simple flash in the pan. Already last March, competing platform OKX also suspended USDT trading for the European Economic Area, in anticipation of the implementation of MiCA.
THE Regulatory compliance headaches for crypto operators it’s very real today, especially for heavyweights like Kraken. However, instead of enduring it as a constraint, some choose to anticipate this new regulated era to better embrace it.
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Eddy S.
The world has evolved and adaptation is the best weapon to survive in this wavering universe. The crypto community manager at the base interests me in everything that touches or comes close to the blockchain and its derivatives. With a view to sharing my experience and learning about a domain that I am passionate about, I write informative and décontractés a la fois articles.
DISCLAIMER
The views, thoughts and opinions expressed in this article are solely those of the author and should not be relied upon as investment advice. Do your research before making any investment decisions.