Kraken, the cryptocurrency exchange based in San Francisco, is reportedly considering withdrawing support for the stablecoin USDT in the European Union (EU). Bloomberg has reported that Kraken is actively assessing its European support for the stablecoin issued by Tether.
Various European digital asset trade associations and think tanks have cautioned that the Markets in Crypto-Assets Regulation (MiCA) of the EU could potentially ban the largest stablecoins based on trading volume. MiCA is upcoming legislation in the EU that will establish rules for the oversight, protection of consumers, and environmental safeguards for crypto assets. The law also includes measures aimed at reducing financial crimes such as market manipulation, money laundering, and terrorist financing. It is scheduled to come into effect in December 2024.
USDT is currently the largest stablecoin in terms of market capitalization and aims to maintain a 1:1 peg to the US dollar.
Marcus Hughes, the global head of regulatory strategy at Kraken, stated in an interview with Bloomberg that their stablecoin offerings are continuously evolving. He said, “We are thoroughly planning for all possible scenarios, including situations where it may not be feasible to list specific tokens like USDT. This is something we are actively reviewing, and as the situation becomes clearer, we can make definitive decisions.”
Hughes also acknowledged that the number of stablecoins offered by Kraken in Europe is likely to be reduced in the future.
Note: The article contains an image sourced from Midjourney.