Crypto exchange platform Kraken is considering withdrawing support for stablecoin USDT (Tether) in the European Union in response to the upcoming implementation of the Markets in Crypto-Assets (MiCA) regulation.
We are absolutely considering all possibilities, including situations where listing specific tokens such as USDT is simply not tenable. This is an issue we are actively examining, and when the situation becomes clearer, we can make firm decisions regarding it.
Kraken
This regulatory framework, which will be implemented in two phases, imposes strict transaction limits and reserve requirements for certain categories of stablecoins, including Asset-Referenced Tokens (ARTs) and Electronic Money Tokens (EMTs).
The new rules regarding ARTs and EMTs will come into effect on June 30, 2024, while those affecting crypto service providers will be applicable from December 30, 2024. In light of these changes, Kraken is evaluating the possibility of delisting specific tokens like USDT if it proves impractical.
Kraken’s Response: ‘No Plans to Remove Tether’
In a statement shared with CoinAcademy, a Kraken spokesperson explained that the exchange currently has ‘no plans to remove Tether’.
There are currently no plans to remove Tether from the listing or modify our USDT trading pairs.
As a leading cryptocurrency exchange, we constantly assess our strategy and global operations to ensure we remain compliant today and in the future.
We are committed to following the rules while continuing our mission to accelerate the adoption of this asset class.
Kraken Spokesperson
Tether’s Reaction and MiCA’s Limitations
In response to Kraken’s statements, Tether expressed its expectation that exchanges focus more on euro liquidity for European clients while continuing to use USDT as an entry and exit solution.
However, Tether CEO Paolo Ardoino criticized European regulation, particularly the provision requiring 60% of stablecoin reserves to be held in liquidity deposits spread across multiple banks, a requirement difficult to meet due to European banks’ reluctance to accept such activity.
With a current market capitalization of $111.2 billion, USDT faces significant regulatory limits under MiCA, including a daily transaction restriction of €200 million for transactions involving major stablecoins.
Actions of Other Platforms and Perspectives
Crypto exchange OKX has already taken similar measures by ceasing support for USDT trading pairs in the European Economic Area in March to comply with upcoming regulations.
As Kraken and other market players assess their options in light of MiCA, the future of USDT in Europe remains uncertain, pushing platforms to consider strategic adjustments to maintain compliance while meeting the needs of their users.
