Regulation
Kraken could delist USDT in Europe for this reason!
Sun May 19, 2024 ▪ 3 min read ▪ by Eddy S.
The cryptocurrency sector is experiencing explosive growth, attracting more and more investors. Regulation is however necessary, hence the European legal framework MiCA which will come into force from 2024. Faced with these new rules, Kraken is seriously considering removing the stablecoin Tether (USDT) from its European offers.
Kraken, leader in crypto compliance
In anticipation of the new MiCA regulations, Kraken recently revealed that it was seriously considering removing the stablecoin Tether (USDT) from its European offerings. Far from being a trivial decision, this major change illustrates the platform’s determined desire to respond proactively to future regulatory obligations.
“We are absolutely preparing for all eventualities,” underlined a spokesperson, emphasizing a pragmatic and proactive approach, far from the defensive postures of certain crypto players questioning the legitimacy of MiCA.
A significant challenge for stablecoins
At the heart of Kraken’s concerns: MiCA’s strict new rules specifically targeting stablecoins considered “important” by European regulators. This is particularly the case of the USDT token issued by Tether, whose market capitalization exceeds $80 billion. For these major stablecoins, the European text provides for a strict cap on daily transactions of 200 million euros. A restrictive framework that could seriously hamper their widespread use as an entry point to crypto.
But that’s not all! The new regulations would also require issuers to hold at least 60% of their reserves in the form of traditional bank deposits. A complex obligation according to Paolo Ardoino, the boss of Tether, who underlines the difficulty finding willing banks to accept this type of crypto activity.
Beyond the specific case of Kraken, this wave of regulatory adjustments in the crypto ecosystem seems far from being a simple flash in the pan. As early as last March, the competing platform OKX also suspended USDT trading for the European Economic Area, in anticipation of the implementation of MiCA.
THE A regulatory compliance headache for crypto players is very real today, especially for heavyweights like Kraken. But rather than supporting it as a constraint, some choose to anticipate this new regulated era to better adopt it.
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Eddy S.
The world is evolving and adaptation is the best weapon to survive in this undulating universe. Basically a crypto community manager, I am interested in everything directly or indirectly related to blockchain and its derivatives. In order to share my experience and raise awareness of a field that fascinates me, there is nothing better than writing articles that are informative and relaxed at the same time.
DISCLAIMER
The views, thoughts and opinions expressed in this article belong solely to the author and should not be considered investment advice. Do your own research before making any investment decisions.