Regulation
Support Exchange to delist USDT and five others by July 1 to comply with MiCA regulations
Cryptocurrency exchange Uphold has informed its European users of its decision to discontinue support for six stablecoins starting July 1. Uphold claims that the removal of these stablecoins is in line with the European Union Markets on Crypto Assets (MiCA) regulations.
As a result, Tether (USDT), Pax Dollar (USDP), Gemini Dollar (GUSD), Frax Protocol (FRAX), Dai (DAI) and TrueUSD (TUSD) will no longer be traded on the exchange.
Users holding these stablecoins must convert them into others cryptocurrencies before June 28th. Otherwise, an automatic conversion to USD Coin (USDC) will occur.
Regulations that change how cryptocurrency exchanges operate
THE MiCA framework it was passed in May 2023 but became partially effective in June 2023. The laws are expected to come into full force by the end of 2024. Meanwhile, MiCA’s stablecoin laws will take effect in the European Economic Area on June 30.
As a result, they are rolling out Uphold and other cryptocurrency exchanges, including Binance, OKX, and Kraken vital changes to their market prices to comply with the regulations. Additionally, cryptocurrency exchanges in the EU must hold licenses as credit or e-money institutions under MiCA.
Interestingly, MiCA regulations are stricter on fiat-backed stablecoins. These measures concern electronic money tokens that have reached a certain adoption threshold predetermined by seven quantitative and qualitative indicators.
Furthermore, these laws give the European Banking Authority control over virtual tokens rather than local authorities in EU member states.
Additionally, MiCA laws require fiat-backed stablecoins to have a 1:1 collateral ratio of a liquid reserve. Stablecoin issuers must create and maintain liquid reserves managed by third parties and separated from other assets.
The new rules prohibit it algorithmic stablecoins, with the aim of strengthening consumer trust in digital resources and ensuring their reliability. Events such as the collapse of Terraform and the delisting of the UST stablecoin have led to such regulations.
Cryptocurrency Exchanges React to Updated MiCA Regulations
In addition to Uphold, other major cryptocurrency exchanges, such as Binance, revised their stablecoin listing policies in early June to comply with MiCA. In compliance with the rules, Binance has divided its stablecoins into regulated and unlicensed coins.
Binance has not clearly defined which stablecoins qualify as regulated and which are not authorized. OKX delisted stablecoin Tether in Europe, but did not mention MiCA in its announcement.
On the other hand, Kraken is considering withdrawing its support for USDT in the European region. Meanwhile, Crypto consultant Antonio Benessere believes that the MiCA stablecoin regulations demonstrate that not all USD stablecoins receive the same treatment.
He says it will be fascinating to find out which stablecoins are approved by regulators. However, while some stablecoins face uncertainty, those backed by the Euro could benefit from these new regulations. Overall, these laws will change the cryptocurrency landscape in Europe.
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