Kraken Evaluates Potential Delisting of USDT in the EU
The cryptocurrency exchange Kraken is “actively reviewing” the status of the stablecoin USDT in light of new EU regulatory rules, reports Bloomberg.
“We have contingency plans for all scenarios, including situations where listing specific tokens like USDT is simply not prudent. We are actively reviewing this matter and will make firm decisions once the position becomes clearer,” stated Kraken’s Head of Global Regulatory Strategy, Marcus Hughes.
Currently, Kraken has no plans to delist USDT in the European market, stated the exchange’s senior executive, Mark Greenberg.
Let’s be clear: @krakenfx continues to list USDT in Europe and we have no plans to delist at this time.
We know our European clients value access to USDT and we continue to look at all options to offer USDT under the upcoming regime.
We will of course follow all legal…
— Mark Greenberg (@marklg) May 18, 2024
“We know that our European clients value access to USDT, and we will continue to explore all options to offer USDT under the upcoming regulatory regime. Of course, we will comply with all legal requirements, even those we disagree with,” he wrote.
According to Greenberg, the regulatory rules are not yet final. Kraken will do everything possible to offer its European clients all relevant stablecoins, he added.
According to MiCA, new rules for stablecoins will come into effect on June 30, 2024, with the rest following on December 30. The legislation requires stablecoin operators to obtain a license from a competent authority of an EU member state and comply with requirements to ensure the stability of their tokens.
Companies will need to ensure full disclosure of information to clients, present a public business model, establish an effective management system, including risk management, register with the EBA, create a redemption mechanism, and maintain sufficient reserves.
A Kraken representative told The Block that the trading platform currently has “no plans to delist USDT or change trading pairs” with the stablecoin.
Tether expects that cryptocurrency exchanges will “fairly focus on euro liquidity for European clients while retaining USDT” as a fiat gateway solution.
In April, Tether CEO Paolo Ardoino stated that the company is still discussing potential risks for stablecoins with the regulator in connection with MiCA. He described storing reserves in uninsured cash deposits instead of treasury bills as “not a very good idea.”
Just to correct the statement: we’re still discussing with the regulator about our concerns that I expressed in our interview, that would pose severe risks to stablecoins regulated in EU.
Uninsured cash deposits are not a good idea.
We should learn from what happened with…
— Paolo Ardoino ? (@paoloardoino) April 11, 2024
“We should learn from what happened with Silicon Valley Bank and another leading stablecoin in the US. If a bank goes bankrupt, uninsured money does too. Stablecoins should be able to hold 100% reserves in treasury bills, rather than expose themselves to bank insolvency risks,” he wrote.
In March, media reported on plans by the cryptocurrency exchange OKX to delist USDT trading pairs for clients from the EEA. Journalists cited the upcoming implementation of MiCA as the reason for the decision.
Back in April, MakerDAO founder Rune Christensen warned of potential DeFi challenges in the EU. According to him, European regulators are “very likely” to interpret the provisions of the legislation to require a MiCA license.
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