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Kraken Reevaluates USDT Listings in Europe Amid Impending MiCA Regulations
Kraken, a leading cryptocurrency exchange, is contemplating the removal of support for the stablecoin Tether (USDT) within the European Union, in anticipation of the forthcoming Markets in Crypto-Assets Regulation (MiCA). This regulatory framework aims to set stringent guidelines on transaction limits and reserve requirements for stablecoins.
According to a recent Bloomberg report, Kraken is “actively reviewing” its approach to ensure compliance with MiCA, which will be implemented in stages. The rules specifically targeting stablecoins—referred to as asset-referenced tokens (ARTs) and e-money tokens (EMTs)—are scheduled to be enforced starting June 30, 2024. Provisions affecting crypto service providers will follow on December 30, 2024.
Marcus Hughes, Kraken’s global head of regulatory strategy, emphasized the necessity of preparing for all scenarios, including potential delistings. “We’re absolutely planning for all eventualities, including scenarios where listing certain tokens like USDT might not be viable,” Hughes stated. He added that the exchange would make definitive decisions as regulatory positions become clearer.
In response to Kraken’s considerations, Tether expressed expectations that exchanges would prioritize EUR liquidity for European customers while keeping USDT as an option for entering and exiting the market.
The MiCA regulation does not explicitly refer to “stablecoins,” but under its scope, ARTs and EMTs—which include major stablecoins like USDT—could be deemed “significant” by the European Banking Authority based on specific criteria. Notably, daily transactions involving large stablecoins like USDT could be capped at 200 million euros.
Tether’s CEO, Paolo Ardoino, has voiced concerns about the new European regulation, particularly a stipulation requiring that 60% of stablecoin reserves be held in cash deposits across multiple banks. “Very few banks accept this type of business in Europe. It’s already very difficult to secure even one,” Ardoino remarked during an interview.
At present, USDT holds a market capitalization of $111.2 billion and a global trading volume of $61.24 billion. Another major crypto exchange, OKX, already took steps similar to those Kraken is considering by discontinuing support for USDT trading pairs in the European Economic Area earlier in March, in order to align with the upcoming regulatory changes.
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