- Kraken clarifies its stance on potentially delisting USDT.
- A company executive assures Kraken has no immediate plans to remove USDT from its listings.
- Despite this assurance, the looming MiCA regulations could compel Kraken to delist USDT if Tether doesn’t comply.
Recently, rumors swirled that Kraken could be considering cutting support for USDT in the European Union ahead of the upcoming MiCA regime, which will kick in this July.
A Kraken spokesperson hinted at the exchange bracing for the worst, given Tether’s apparent disinterest in aligning with the new rules. As anxiety grew among users, Kraken’s Global Head of Asset Growth and Management, Mark Greenberg, stepped forward to set the record straight.
Kraken Sets The Record Straight
“We have no plans to delist at this time,” Greenberg said, dismissing rumors about Kraken potentially dropping USDT from the EU market. He emphasized that Kraken recognized USDT’s role in the European market and would continue to support it.
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Greenberg explained that Kraken is exploring all options to keep USDT available under the upcoming MiCA regulations. He added that Kraken would comply with all legal requirements, even those they may disagree with, hinting that if Tether were ultimately banned, Kraken would adhere to the law.
Greenberg noted that the MiCA rules regarding stablecoins still need to be finalized. Until the regulatory position is clearer, Kraken will continue offering all relevant stablecoins to its European customers.
However, with the new regulations set to take effect in July, the future of stablecoins in the EU remains uncertain.
MiCA’s Looming Threat to Stablecoins
Although not finalized, the upcoming MiCA regime could challenge the legitimacy of many regional stablecoins, particularly USDT. Regulators stress that many stablecoins currently circulated in Europe have yet to be authorized and regulated.
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MiCA regulations stipulate that only EMIs and credit institutions can legally issue fiat stablecoins within the European Economic Area trading bloc. This means that stablecoin issuers like Tether and Circle must either become an EMI or partner with one to continue offering their products legally in the region.
Tether’s CEO confirmed that the company had no plans to comply with the new MiCA regulations in the medium term, expressing concerns about the potential risks and impacts of the new rules.
“That would pose severe risks to stablecoins regulated in the EU,” Ardoino said in response to MiCA’s added scrutiny on stablecoin issuers. He urged regulators to learn from incidents like the collapse of Silicon Valley Bank and its impact on a major US stablecoin. “If a bank goes bankrupt, uninsured cash goes into bankruptcy,” he warned.
Until MiCA amends its current regulations or Tether announces compliance, USDT’s legal status in the EU is expected to become illegal after July, presenting a complex dilemma for users and companies in the region.
On the Flipside
- Due to USDT’s lack of interest in complying with the new MiCA rules, OKX has already removed support for the stablecoin in the EU.
- MiCA is still being finalized and is expected to be fully implemented by 2025.
- USDT issuer Circle is also relocating its operations from the EU to the US.
Why This Matters
The new MiCA regime can shake up the crypto industry in the EU, particularly impacting the stablecoin market. If Tether remains steadfast in its protest against the new rules, exchanges like Kraken will be forced to delist the token, leading to far-reaching implications for the trading bloc.
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