The Latest on Kraken’s Support for Tether
Recently, Kraken addressed rumors regarding the potential delisting of Tether’s stablecoin (USDT) in Europe. Kraken has confirmed that it will continue to support Tether until the new regulations are fully implemented.
Clarification from Kraken
- Kraken’s initial considerations led to speculation about withdrawing support for Tether (USDT).
- A report last Friday revealed that Kraken is actively reviewing USDT’s status in the EU in anticipation of the Markets in Crypto-Assets Regulation (MiCA) regulations coming into effect in July 2024.
- The exchange is contemplating delisting USDT to comply with the upcoming regulations.
Tether Poses Challenges
Responding to the ongoing rumors, Mark Greenberg, Kraken’s Global Head of Asset Growth & Management, emphasized that there are currently no plans to cease supporting Tether.
- Greenberg highlighted that European users value access to USDT and that Kraken maintains stablecoin offerings.
- He affirmed that the exchange will adhere to all legal requirements, even if they disagree with them.
- These decisions will be based on the finalization of the upcoming EU regulations.
Regulatory Scrutiny and Stablecoin Challenges
Global authorities have been intensifying regulatory scrutiny of stablecoins due to concerns about their potential misuse in illicit activities.
- Tether, as the largest stablecoin globally, has faced regulatory challenges in both the US and European markets.
- Recent penalties imposed on Tether in 2021 by regulatory bodies highlighted issues with its reserves.
- Ripple CEO Brad Garlinghouse has expressed concerns about US government action against Tether potentially impacting the entire cryptocurrency market.
- He believes a black swan event in the cryptocurrency space is inevitable, and the US government’s scrutiny of Tether could play a significant role in triggering such an event.
Impacts of MiCA Regulations
- Tether initially refused to comply with MiCA, but the CEO has shown reservations due to pressure from major markets in the US and Europe.
- MiCA regulations stipulate that issuers of fiat-backed stablecoins must comply with existing electronic money institution (EMI) rules, causing many stablecoins in Europe to operate illegally.
Hot Take: Navigating Tether’s Regulatory Challenges
Cryptocurrency exchanges like Kraken are taking proactive steps to address regulatory uncertainties and compliance requirements. As the landscape evolves, ensuring adherence to regulations while meeting customer needs remains a priority for these platforms.
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