- Kraken is reportedly “actively reviewing” strategies to meet the requirements of MiCA law.
- Tether’s chief executive officer Paolo Ardoino has spoken out against European rule.
In light of the impending implementation of the Markets in Crypto-Assets Regulation (MiCA) in the European Union, cryptocurrency exchange Kraken is contemplating the removal of support for the stablecoin Tether (USDT).
Kraken is reportedly “actively reviewing” strategies to meet the requirements of the forthcoming MiCA framework, as reported by Bloomberg on May 17. Stablecoins (asset-referenced, or ARTs) and e-money tokens (EMTs) will be subject to the regulations on June 30, 2024, while crypto service providers will be subject to the regulations on December 30, 2024. The regulation will be implemented in two parts.
Marcus Hughes, Kraken’s global head of regulatory strategy stated:
“We’re absolutely planning for all eventualities, including situations where it’s just not tenable to list specific tokens such as USDT. It’s something that we’re actively reviewing, and as the position becomes clearer, we can take firm decisions on that.”
Stringent Compliance Norms
Moreover, purportedly retaliating against Kraken, Tether said that exchanges should prioritize EUR liquidity for European consumers and keep USDT as an on-ramp off-ramp solution.
Although the term “stablecoin” is not used in the MiCA law, the European Banking Authority (EBA) has criteria to determine if ARTs or EMTs are important stablecoins. There is a daily cap of 200 million euros on bigger stablecoin transactions, such as USDT.
Tether’s chief executive officer Paolo Ardoino has spoken out against the European rule, stating that his business has no plans to comply with MiCA. Ardonio specifically brought up the need for several institutions to hold 60% of stablecoin reserves in cash.
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