The looming enforcement of the European Union’s Markets in Crypto-Assets (MiCA) regulations has sent ripples through the cryptocurrency exchange ecosystem. As a preparatory measure for compliance, cryptocurrency exchanges have begun delisting certain stablecoins within the European Economic Area (EEA). The forthcoming MiCA regulations spell out stricter requirements for fiat-backed and algorithmic stablecoins, aiming to provide a regulatory framework for crypto asset markets within the EU.
Some of the exchanges taking proactive steps include Uphold and Binance. Uphold has informed its user base in a recent announcement that, come July 1, it will delist a selection of stablecoins. These include DAI, FRAX, GUSD, USDP, TUSD, and USDT, significantly altering its portfolio available to European customers. Despite the delisting, Uphold will continue to support USDC, EURC, and PYUSD.
Echoing a similar trend, Binance has removed stablecoin funding from its array of derivatives products for its clients in the EEA. This move also includes the discontinuation of “unregulated stablecoins” from trading and custody services, reward programs, as well as other offerings like margin trading, Binance loans, and cloud mining services. Important to note, EEA clients have been barred from funding derivatives with stablecoins under Binance’s updated policy.
Another significant player, Okx, took a different approach by announcing in March its decision to drop tether (USDT) in Europe. As a replacement, Okx is introducing EUR and USDC as trading pairs for spot trading, adding an impressive lineup of 30 new EUR pairs soon.
While some exchanges are rethinking their listings, others like Kraken are holding their ground. Kraken’s global head of asset growth and management affirmed that the exchange continues to list USDT in Europe and is not planning any delistings at this juncture.
At the heart of the precautionary delistings lie the requirements set forth by the MiCA regulations. These regulations obligate stablecoin issuers in Europe to secure licenses as Electronic Money Institutions or credit institutions, maintain a 1:1 reserve ratio, and prohibit algorithmic stablecoins. Exchanges are clearly aligning their services ahead of time to sidestep any potential regulatory discord with MiCA’s stringent standards.
Jamie Redman, a notable figure in the crypto journalism space, underscored the industry’s response and shift in strategy to adhere to EU’s upcoming regulatory landscape. Exchanges like Uphold, Binance, and Okx are at the forefront, tailoring their offerings to fit within the new framework. As the deadline approaches, the anticipation of how MiCA will reshape the crypto environment in Europe continues to build.
