Markets
MiCA deadline looming: Cryptocurrency exchanges shake up stablecoins
The European Union’s Markets in Crypto Assets (MiCA) regulation will come into force on June 30, just three days from now. As such, many crypto exchanges offering services in the block are already taking action, primarily by abandoning stablecoin offerings.
“This will be a first step towards entering the new regulatory framework, and will have a significant impact on the stablecoin market in the European Economic Area (EEA),” said Binance, the largest crypto exchange in terms of transaction volume.
Crypto Exchanges Have Abandoned Stablecoins
At least four cryptocurrency exchanges have confirmed that they are limiting access to certain stablecoins to users in the EEA. Bitstamp was the latest to confirm on Wednesday that it would delist the euro-denominated stablecoin, EURT, before the June 30 deadline.
EURT is a euro-pegged stablecoin issued by Tether, the company behind the largest stablecoin in circulation, USDT, with a market cap of over $112.7 billion. Interestingly, Bitstamp became one of the first crypto exchanges to list EURT in November 2021.
“Electronic money tokens (EMT) which are not denominated in euros and are already available on exchanges but are not subject to MiCA regulation, will not be delisted, although their availability to European customers will be limited on certain products .” Stamp-bit wrote in his ad.
“Bitstamp will not list any new EMTs that do not meet MiCA requirements nor will it engage in any commercialization of them.”
Another major name to act before MiCA is Binance. As Finance Magnates reported earlier, The crypto exchange has already blocked access to some servicesincluding copy trading. This will also bring new restrictions, including restricting the purchase of unauthorized stablecoins and limit new borrowing and transfers of unauthorized stablecoins in margin trading.
Uphold, another cryptocurrency exchange linked to Ripple, also confirmed the delisting of six stablecoins, including the popular USDT, for European users. However, it will continue to support USDC, EURC and PYUSD.
Comply with MiCA from June 30
Similar to MiFID, Mica The regulation will bring together cryptocurrency services in the EU under one regulatory umbrella. This regulation will impact the distribution of cryptocurrencies in the Union, meaning that both retail and institutional players will be affected in one way or another.
With the approval of the European Parliament in 2023, the MiCA is expected to be implemented in two phases: Stablecoin rules to come into effect on June 30, 2024 and then broader compliance on exchanges and wallets which will come into effect from December 30, 2024.
Under MiCA, stablecoins backed by fiat currencies on the blockchain would be categorized as “e-money tokens,” while other asset-backed tokens would be “asset-referenced tokens.” In both cases, stablecoin issuers must maintain a 1:1 reserve. This will also place algorithmic stablecoins under liability, requiring them to maintain their value.
The regulation would also limit the daily limit on transactions with non-euro-pegged stablecoins to just $1 million.
“As the world’s oldest cryptocurrency exchange, we have consistently advocated for a proportionate response to regulation that protects consumers while enabling the continued maturation of cryptocurrencies as an asset class” , said James Sullivan, Bitstamp UK Managing Director. “We communicate directly with the small proportion of our clients whose asset mix is affected. »
The exchanges have been preparing for months
A few crypto exchanges were already taking steps to comply with MiCA earlier this year. In March, OKX confirmed the delisting of USDT pairs in the EEA, without mentioning MiCA. “Please note that not all tokens are available on all markets due to regulatory requirements,” noted an email sent by the exchange to its European clients.
Interesting way, Kraken According to a Bloomberg report in March, Kraken also reviewed the USDT pairs it offered in the EU and considered removing them to comply with MiCA. However, following the report, Kraken’s global head of growth and asset management, Mark Greenberg, clarified that the exchange “continues to list USDT in Europe and we have no plans to delist it at this time.”
“We know that our European customers value access to USDT and we continue to explore all options for offering USDT under the upcoming regime,” he added. “We will of course comply with all legal requirements, even those we do not agree with. But the rules are not yet finalized and we continue to do everything we can to continue to offer all relevant stablecoins to our European customers.”
So far, Kraken has not officially announced anything regarding the removal of any stablecoin pairs to comply with MiCA.
Interestingly, a recent report found that only 9% of the 68 cryptocurrency companies surveyed are fully MiCA compliant needs, while 25 percent have yet to begin preparations.
The European Union’s Markets in Crypto Assets (MiCA) regulation will come into force on June 30, just three days from now. As such, many crypto exchanges offering services in the block are already taking action, primarily by abandoning stablecoin offerings.
“This will be a first step towards entering the new regulatory framework, and will have a significant impact on the stablecoin market in the European Economic Area (EEA),” said Binance, the largest crypto exchange in terms of transaction volume.
Crypto Exchanges Have Abandoned Stablecoins
At least four cryptocurrency exchanges have confirmed that they are limiting access to certain stablecoins to users in the EEA. Bitstamp was the latest to confirm on Wednesday that it would delist the euro-denominated stablecoin, EURT, before the June 30 deadline.
EURT is a Euro-pegged stablecoin issued by Tether, the company behind the largest stablecoin in circulation, USDT, with a market capitalization of over $112.7 billion. Interestingly, Bitstamp became one of the first crypto exchanges to list EURT in November 2021.
“Electronic money tokens (EMT) which are not denominated in euros and which are already available on the exchange but do not fall under the MiCA regulation, will not be delisted, although their availability to European customers will be limited on certain products”, Bit stamp wrote in his ad.
“Bitstamp will not list any new EMTs that do not meet MiCA requirements and will not engage in any commercialization of them.”
Binance is another big name that will be taking action ahead of MiCA. As Finance Magnates reported earlier, the crypto exchange has already blocked access to certain servicesincluding copy trading. This will also result in other restrictions, including restricting the purchase of Unauthorized stablecoins and limit new borrowing and transfers of unauthorized stablecoins through margin transactions.
Uphold, another crypto exchange linked to Ripple, also confirmed the delisting of six stablecoins, including the popular USDT, for European users. However, it will continue to support USDC, EURC and PYUSD.
Comply with MiCA from June 30
Similar to MiFID, Mica The regulation will bring together cryptocurrency services in the EU under a single regulatory umbrella. This regulation will impact the distribution of cryptocurrencies in the Union, meaning that individual and institutional players will all be affected in one way or another.
With the approval of the European Parliament in 2023, the MiCA is expected to be implemented in two phases: Stablecoin rules to come into effect on June 30, 2024 then broader compliance on exchanges and wallets which will come into force from December 30, 2024.
Under MiCA, stablecoins backed by fiat currencies in the bloc would be categorized as “e-money tokens,” while other asset-backed tokens would be “asset-referenced tokens.” In both cases, stablecoin issuers must maintain a 1:1 reserve. It will also bring algorithmic stablecoins under the purview of the law, requiring them to maintain their value.
The regulations would also limit the daily limit of transactions with non-euro-pegged stablecoins to just $1 million.
“As the world’s oldest cryptocurrency exchange, we have consistently advocated for a proportionate response to regulation that protects consumers while enabling the continued maturation of cryptocurrencies as an asset class,” said said James Sullivan, UK Managing Director of Bitstamp. “We communicate directly with the small proportion of our clients whose asset allocation is affected. »
The exchanges have been preparing for months
A few crypto exchanges were already taking steps to comply with MiCA earlier this year. In March, OKX confirmed the delisting of USDT pairs in the EEA, without mentioning MiCA. “Please note that not all tokens are available on all markets due to regulatory requirements,” noted an email sent by the exchange to its European clients.
Interesting way, Kraken According to a Bloomberg report in March, Kraken also reviewed the USDT pairs it offered in the EU and considered removing them to comply with MiCA. However, following the report, Kraken’s global head of growth and asset management, Mark Greenberg, clarified that the exchange “continues to list USDT in Europe and we have no plans to delist it at this time.”
“We know that our European customers value access to USDT and we continue to review all options to offer USDT under the next regime,” he added. “We will of course comply with all legal requirements, even those with which we do not agree. But the rules are not yet finalized and we continue to do everything possible to continue offering all relevant stablecoins to our European customers.
So far, Kraken has not officially announced anything about removing stablecoin pairs to comply with MiCA.
Interestingly, a recent report found that only 9% of cryptocurrency companies, out of 68 surveyed, are fully MiCA compliant requirements, while another 25% have not yet started preparations.