Regulation
Kraken plans to delist Tether amid new EU regulations
Due to new regulations, leading crypto exchange Kraken is “actively considering” whether to remove Attached (USDT) from its European market. Markets in Crypto Assets (MiCA) regulations are expected to be implemented across Europe, potentially creating compliance issues for stablecoins like Tether.
Marcus Hughes, Kraken’s global head of regulatory strategy, revealed that the exchange is preparing for several scenarios, with delisting USDT being one option. However, the final decision will only be made when the regulatory situation becomes clearer.
MiCA Regulation and Market Impact
European banking authorities approved the MiCA regulation in April 2023, imposing strict requirements on stablecoins issued within the EU. The primary goal of these rules is to ensure financial stability and consumer protection, but they also pose significant compliance challenges for stablecoin issuers. The phased implementation of MiCA will see some rules applied by mid-2024, with full implementation by December 2024. OKX has already delisted Tether trading pairs in Europe, and Kraken could follow suit.
Kraken’s Commitment to Compliance
Kraken is committed to adhering to global regulatory standards and promoting the adoption of cryptocurrencies. A spokesperson reassured that there are no immediate plans to delist Tether or change USDT trading pairs. The company continually evaluates its operations to ensure compliance and operational efficiency, underscoring Kraken’s commitment to aligning with regulations and maintaining a secure business environment.
Tether talks with regulators
Tether, the issuer of USDT, is currently in serious discussions with European regulators over the proposed MiCA rules. Paolo Ardoino, CEO of Tether, expressed concerns about the risks associated with the new regulatory framework, particularly the mandate for stablecoins to hold reserves in uninsured cash deposits. He argued that 100% of their reserves should be held in Treasury bonds to avoid exposure to bank failures, citing the collapse of Silicon Valley Bank as a cautionary example. Tether remains hopeful of continuing its discussions with European regulators on these critical issues.
Kraken’s future plans
Kraken aims to adapt to evolving crypto regulations by revising its support for Tether and remaining engaged in regulatory developments. The exchange is committed to maintaining its commitment to innovation and compliance while exploring the evolving regulatory landscape.
Also read how the laws and regulations affecting blockchain technology and cryptocurrencies, like Bitcoin, may impact its adoption.