Regulation
Maintain delisting of 6 Stablecoins, including USDT, by July 1
Uphold, a cryptocurrency exchange, recently announced to its European customer base that it will stop supporting six widely used stablecoins starting July 1, aligning its operations with the Regulation for Crypto-Asset Markets (MiCA). ) of the European Union.
This decision affects stablecoins such as Tether, Dai, Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD).
Introduction to MiCA regulations
Uphold required its users to convert these stablecoins to alternative cryptocurrencies by June 28 or allow the platform to automatically exchange them for USD coins.
MiCA, which was signed into law in May 2023 and partially implemented in June 2023, aims to be fully operational by the end of 2024. This sweeping legislation introduces rigorous regulatory standards for fiat-backed stablecoins and e-money tokens that reach a certain level of adoption. .
The criteria for this level are determined by seven specific quantitative and qualitative indicators. An important change under MiCA is the transfer of regulatory authority from national bodies of EU member states to the European Banking Authority.
Respect the notice to customers
The new rules aim to improve the stability and reliability of the crypto market. They require that all fiat-backed stablecoins be backed by a 1:1 ratio with liquid reserves and that these reserves be held in a separate account, managed by a third party and isolated from other financial assets.
Additionally, MiCA categorically prohibits algorithmic stablecoins, which do not meet these strict guidelines. The overarching goal of these regulations is to build consumer confidence in digital currencies, ensuring that stablecoins function reliably as both a store of value and a medium of exchange.
Under MiCA, issuers of stablecoins must now be authorized either as credit institutions or as electronic money institutions. While this regulatory environment poses challenges for some stablecoins, it potentially favors those backed by the euro, which could thrive under the new rules.
Responses from major cryptocurrency exchanges
In response to MiCA, other major cryptocurrency exchanges have also adjusted their stablecoin policies. For example, Binance reclassified its stablecoin offerings into “regulated” and “unpermitted” categories earlier in June to align with MiCA stipulations.
However, Binance has not yet finalized which stablecoins fall into these categories. In contrast, OKX chose to delist Tether in Europe in March without explicitly attributing the decision to MiCA. In the meantime, Kraken is currently evaluating whether to continue supporting USDT on the European market.
These policy revisions across various platforms illustrate the broader impact of MiCA on the cryptocurrency landscape in Europe. As exchanges adapt to these strict new regulations, the stablecoin market is set to undergo significant transformations, potentially leading to a more stable and reliable digital currency environment.