Kraken has revealed that it plans to delist Tether (USDT) from its European trading platform. This action follows the introduction of the Markets in Crypto Assets (MiCA) law by the European Union, which attempts to provide a thorough legal framework for digital assets under its purview.
The European Union has made a historic effort to provide precise rules and regulations for the cryptocurrency business with the recent implementation of the MiCA law. The law addresses several different topics, such as the issue and trading of digital assets, service providers’ obligations, and protection for customers and market integrity.
The EU’s implementation of MiCA demonstrates its commitment to promoting a safe and open environment for digital assets while mitigating risks, including fraud, money laundering, and market manipulation. The strict guidelines for stablecoins, which are digital assets tethered to fiat money or other assets to preserve a stable value, are one of the law’s core features.
Kraken Speaks on its Plan to Adhere to MiCA
An official from Kraken emphasized the exchange’s dedication to adhering to new regulations and its proactive strategy of coordinating its activities with them. The official who spoke to Coin Expose clarified, “in our continuous endeavors to adhere to MiCA and other pertinent legislation, we are examining the digital assets posted on our site.”
Several industry analysts see Kraken’s action as a step toward increased regulatory compliance and transparency in Bitcoin. Blockchain expert Clara Jennings stated, “MiCA is a crucial rule for the digital asset market in the EU.”
He added “that exchanges like Kraken that are proactive in adhering to these standards will eventually contribute to a more secure and trustworthy market environment.” Kraken’s intentions of delisting Tether are linked to their initial doubt that it will comply with the new MiCA rules. Martha Ezeani improvised that it might be difficult for Tether to comply with these strict regulations given its constant criticism and legal difficulties regarding its reserve policies and transparency.
Future Prospects for Stablecoins Analyzed, May Trigger Stablecoins Modifications Rush
Analysis on Coin Exposure suggests that if Tether encounters major legal obstacles, other stablecoins, including USD Coin (USDC) and Binance USD (BUSD), which have made more transparent and strong attempts to comply with regulatory regulations, may see increasing adoption and market share.
To comply with MiCA’s requirements, stablecoin issuers must improve their reserve policies and transparency. This will likely trigger a surge of enhancements and modifications in the stablecoin industry, which would finally help users by supplying more dependable and safe digital assets.
The analysis also states that while Kraken and other exchanges work to complete its delisting process, the upcoming months will be critical for the industry. Reasons for the increased need for such regulation are linked to the embarrassing failure of Luna’s UST in 2022.
In response to the development, Tether management has issued a statement stating that they expect major cryptocurrency exchanges to appropriately target the EUR liquidity for their European customers while sustaining the USDT as an off-ramp and on-ramp solution.
European Regulators Works on Introducing More Effective Laws
Some European market regulatory authorities are coming together to create more effective regulations that will facilitate safe stablecoin operations and replicate the Regulatory Technical Standards (RTSs). News has it that the European Securities and Markets Authority (ESMA) and European Banking Authority (EBA) are at the forefront of achieving this.
Tether has also brought the cryptocurrency industry’s attention to the initial concerns raised by Paolo Ardoino, its Chief Executive. Paolo remarked earlier on the MiCA law and its restrictions. Arduino revealed that the company intends to avoid complying with the MiCA arrangement.
This is happening at a time when Tether claims they have put in more effort to reach an agreement with various regulators under different jurisdictions. Majors like OKX, followed by Kraken, have commenced dropping the USDT from their European trading platform. They claim this is to prepare themselves for the complete adoption of MiCA. However, the MiCA legal framework won’t be fully implemented until 2025.