Kraken Contemplates Tether’s Delisting in Light of Fresh European Regulations
Kraken, one of the leading crypto exchanges, is currently considering whether to remove Tether (USDT) from its European market due to new regulations. The Markets in Crypto Assets (MiCA) regulations, which will be implemented across Europe, pose compliance challenges for stablecoins like Tether.
Marcus Hughes, Kraken’s Global Head of Regulatory Strategy, stated that the exchange is preparing for various scenarios, including the possibility of delisting USDT. However, the final decision will only be made once the regulatory situation becomes clearer.
The MiCA regulations were approved by the European Banking Authorities in April 2023. These regulations impose strict requirements on stablecoins issued within the EU, with the main goal of ensuring financial stability and consumer protection. However, they also present significant compliance challenges for stablecoin issuers. The phased implementation of MiCA will see some rules enforced by mid-2024, with full implementation expected by December 2024. OKX has already delisted Tether trading pairs in Europe, and Kraken may follow suit.
Kraken is committed to adhering to global regulatory standards and promoting the adoption of cryptocurrencies. A spokesperson confirmed that there are no immediate plans to delist Tether or make changes to USDT trading pairs. The company constantly evaluates its operations to ensure compliance and operational efficiency, demonstrating Kraken’s dedication to aligning with regulations and maintaining a secure trading environment.
Tether, the issuer of USDT, is currently engaged in discussions with European regulators regarding the proposed MiCA rules. Paolo Ardoino, CEO of Tether, has expressed concerns about the risks associated with the new regulatory framework, particularly the requirement for stablecoins to hold reserves in uninsured cash deposits. He argues that 100% of their reserves should be held in treasury bills to avoid exposure to bank failures, citing the collapse of Silicon Valley Bank as a cautionary example. Tether remains hopeful about continuing discussions with EU regulators on these crucial matters.
Kraken’s future plans involve navigating the evolving crypto regulations by reviewing its support for Tether and staying informed about regulatory developments. The exchange is committed to maintaining its dedication to innovation and compliance while exploring the changing regulatory landscape.
Tags: Crypto Regulations