Cryptocurrencies

Cryptocurrency exchange Kraken is considering removing support for the stablecoin Tether (USDT).

Cryptocurrency exchange Kraken is considering removing support for the stablecoin Tether (USDT) in the European Union as Markets for Cryptoassets (MiCA) regulation is set to come into effect.

According to a Bloomberg report on May 17, Kraken is “actively reviewing” its plans to comply with the upcoming MiCA framework. The regulation will be implemented in two phases: the rules applicable to stablecoins (reference assets, or ARTs, and electronic money tokens, or EMTs) will come into force on June 30, 2024, while the rules applicable to crypto service providers will come into force. On December 30, 2024.

“We are fully planning for all eventualities, including situations where specific tokens like USDT cannot be listed,” said Marcus Hughes, global head of regulatory strategy at Kraken. “It is something we are actively reviewing, and as the situation becomes clearer, we can make firm decisions on that.”

In response to Kraken’s statements, Tether reportedly said it expects exchanges to “rightly focus on Euro liquidity for European clients, while keeping USDT as an immediate solution.”

The MiCA Regulation does not use the term “stablecoin”, but ARTs and EMTs are two types of stablecoins that the European Banking Authority (EBA) may consider “significant” based on a specific set of criteria. For larger stablecoins, such as USDT, transactions are limited to €200 million per day.

Tether CEO Paolo Ardoino recently criticized the European regulation, saying the company does not intend to be regulated under MiCA. Specifically, Ardonio mentioned a requirement that 60% of stablecoin reserves be in cash deposits across multiple banks.

“Very few banks accept this type of business in Europe. It is already very difficult to get just one!” Arduino noted in an interview. At the time of writing, USDT’s market capitalization is $111.2 billion, and global trading volume is $61.24 billion.

Cryptocurrency exchange OKX made a similar move in March, stopping support for USDT trading pairs in the European Economic Area to comply with upcoming rules.

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