The abandonment of stablecoins in the EU Whats causing exchanges to make this move
MiCA, or Markets in Crypto-Assets regulation, is on the verge of implementation, and digital asset exchanges are gearing up to adhere to the new law’s requirements. This regulation is designed to safeguard investors, prevent financial crime, and ensure transparency. In light of these recent events, how are crypto exchanges reconsidering their offerings for European traders?
What is known about MiCA
The European stablecoin regulation will go into effect on June 30th, while the European Banking Authority (EBA) and the European Securities Market Authority (ESMA) are in the process of consulting on how to implement the new rules. MiCA necessitates that stablecoin issuers be registered within the EU, but the issue of how this law will apply to decentralized and foreign issuers remains unresolved. EBA representatives have emphasized that there will be no grace period for stablecoins that are already entering the market.
How MiCA classifies stablecoins
Currently, only a small proportion of European institutional funds have access to cryptocurrency, mainly due to regulatory uncertainty. However, the emergence of MiCA is expected to alleviate these concerns by encouraging leading EU banks to offer services such as custody, trading, and issuance of e-money tokens or stablecoins. MiCA also requires stablecoin issuers to maintain sufficient reserves, with the agency paying particular attention to the diversification of these funds.
Which crypto exchanges are abandoning stablecoins in Europe
Uphold has announced that it will stop supporting USDT, DAI, FRAX, GUSD, USDP, and TUSD stablecoins for users from the European Economic Area (EEA) to comply with MiCA requirements. Binance has also stated that it will restrict access to unauthorized stablecoins for users in the EEA from June 30, and Kraken has made a similar announcement regarding USDT in Europe.
OKX has also deprived European users of trading pairs with the stablecoin USDT since March 14th, likely due to the fact that MiCA includes a clause for the mandatory licensing of stablecoin operators, which the crypto exchange does not have. As an alternative to Tether’s USDT, OKX is offering European users USDC.
What is going to change in Europe with MiCA
For crypto investors, MiCA provides appreciated regulatory insights that can shape the trajectory of digital asset regulation. The regulation aims to bring clarity to one of the world’s largest markets, making the EU an even more attractive place for web3 companies to innovate and attract talent. Regulatory clarity drives innovation and market competitiveness, providing the confidence and certainty that both investors and businesses need.
