The new regime for crypto assets, scheduled to come into force in July, could trigger the removal of USDT, a stablecoin and altcoin pegged to the US dollar, from the Kraken trading platform.
Will Kraken delist altcoin USDT?
The leading cryptocurrency exchange is allegedly considering the idea of removing the stablecoin from its platform in the European Union. In an interview on Thursday, Marcus Hughes, Kraken’s head of global regulatory strategy, confirmed that the decision is currently under review. “We are certainly planning for all possibilities, including situations where listing certain tokens such as USDT is unacceptable,” Hughes said. “This is an issue we are actively looking at and we can make definitive decisions as the position becomes clearer,” he added.
The EU has demonstrated its commitment to the crypto-asset sector under its jurisdiction by introducing a cryptocurrency regulatory framework called the Capital Assets Market (MiCA). This regulation has been under consideration for a long time and is planned to finally begin in July 2024, which is just around the summer. Normally, stablecoins are used by investors who want to transfer crypto assets between exchanges. However, MiCA imposes restrictions on these stablecoins offered to investors, as they will be supervised by the European Banking Authority (EBA).
New process for stablecoins
The EBA and the EU’s market regulator ESMA are working together to introduce more rules for stablecoins in the form of Regulatory Technical Standards (RTSs). The intense push towards stablecoin regulation is fueled by the tragic collapse of Terra Luna’s UST in 2022. In response to the situation, Tether stated that its expectation is for exchanges to “maintain USDT as an off-ramp solution while rightfully focusing on EUR liquidity for European customers.”
Additionally, the USDT issuer highlighted that its CEO, Paolo Ardoino, had previously expressed concerns about certain aspects and requirements of the MiCA regulation. While Tether has expressed its commitment to reaching consensus with regulators in different jurisdictions, Ardoino stated that the firm has no plans to regulate under the MiCA framework for now.
Exchanges like OKX have moved ahead of Kraken to phase out USDT on their platforms in Europe in preparation for MiCA implementation. It is noteworthy that the MiCA regulation will not come into force until 2025.
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