Kraken actively reviewing USDT suspension in EU under MiCA regulation

Cryptocurrency exchange Kraken is considering delisting the USDT stablecoin in the EU.

According to a Bloomberg report, the exchange is “actively reviewing” delisting plans. The possible abandonment of USDT is due to the new regime for digital assets, which will come into force in the EU in July.

Tethers stablecoin will likely be affected by new EU rules, specifically the Markets in Crypto Assets (MiCA) regulations. The guidelines, which have yet to be finalized by the European Banking Authority, will impose restrictions on stablecoins offered to European investors.

“We‘re absolutely planning for all eventualities, including situations where it’s just not tenable to list specific tokens such as USDT.”

Marcus Hughes, Krakens global head of regulatory strategy

Tethers response

Tether officials expect exchanges to focus on euro liquidity for EU clients while keeping USDT as a temporary solution. However, Tether CEO Paolo Ardoino previously indicated that Tether has no plans to be regulated by MiCA rules in the medium term.

In March, another major cryptocurrency exchange, OKX, suspended USDT trading for users in the European Union. This decisions was likely influenced by the upcoming regulation of cryptocurrencies under MiCa.

Legal framework and compliance

MiCA will allow crypto exchanges and companies providing cryptocurrency custody services to offer their products legally in the EU. The law also establishes rules for the operation of stablecoin issuers.

After the MiCA law comes into force, crypto companies must obtain registration in one of the bloc‘s member states, allowing them to operate throughout the entire EU. MiCA’s stablecoin provisions will come into effect as early as June 2024.