Kraken Considers Withdrawing Support for USDT in the EU
Kraken is contemplating the option of no longer supporting USDT, the largest stablecoin, in the EU if it fails to comply with the upcoming MiCA rules. This decision is driven by the exchange’s commitment to align with regulations governing the cryptoasset markets that are expected to come into effect this year.
- European Banking Authority (EBA) continues to encourage stablecoin issuers to operate in Europe following certain guiding principles.
- Final guidelines by the EBA, which involve restrictions on stablecoins like Tether, are yet to be established.
Kraken’s Position on USDT Support in the EU
The exchange, Kraken, is currently evaluating various scenarios in Europe and is considering the possibility of delisting USDT if it becomes unsustainable. Kraken stays proactive in assessing the regulatory landscape under the European Union authorities.
- Kraken’s global head of regulatory strategy, Marcus Hughes, emphasized the evolving regulatory environment and the future limitations on stablecoin offerings in Europe.
“The scope of stablecoins that are currently available in Europe may not be sustainable in the future. The ability to offer certain stablecoins in the EU will depend on the assets registered under the e-money regime,” said Marcus Hughes.
Concerns Among Exchanges in Europe
Several exchanges, including Kraken, are expressing concerns regarding the legal standing of stablecoins in Europe. Notably, OKX had previously suspended USDT support, citing regulatory uncertainties, indicating a broader trend in the region.
- Tether CEO Paolo Ardoino suggested that exchanges prioritize euro liquidity for European users while keeping USDT as an available option.
- Ardoino stressed the importance of stablecoins maintaining 100% reserves in treasury bills to avoid potential bank failures as mandated by MiCA rules.
“Stablecoins should hold 100% reserves in treasury bills to mitigate risks associated with bank failures. We are in communication with EU regulators to address these concerns,” commented Paolo Ardoino.
In response to the increasing issuance of stablecoins, the European Banking Authority highlighted the necessity of robust governance and risk management rules before the implementation of MiCA rules in 2023. The surge in stablecoin usage within the EU primarily facilitates the trading of other digital assets.
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