Kraken may abolish USDT in the EU to comply with MiCA.

Major cryptocurrency exchange Kraken is considering delisting Tether (USDT) from its European Union (EU) platforms to comply with the upcoming Markets for Cryptocurrency Assets (MiCA) regulations, according to a recent report from Bloomberg.

The EU is setting MiCA regulations for cryptocurrency trading, specifically targeting stablecoins like Tether’s USDT. These rules are scheduled to come into effect in July and will likely limit how these stablecoins are offered in the EU.

Marcus Hughes, Kraken’s head of global regulatory strategy, said in an interview Thursday that the company is awaiting clearer guidance on the rules before making a final decision.

“We are prepared for all situations, including situations where certain tokens, such as USDT, cannot be listed. This is something we are actively reviewing and once we have clarity on our position we can make a firm decision on this,” Hughes said.

In response to Kraken’s considerations, Tether emphasized the importance of focusing on euro liquidity for European customers while maintaining USDT as its trading gateway.

Tether CEO Paolo Ardoino expressed concerns about specific MiCA requirements and said Tether would continue to work with regulators. However, the company does not plan to be regulated by MiCA in the medium term.

The MiCA regulations aim to establish a licensing system for stablecoin issuers and impose stricter corporate governance and reserve management requirements.

Kraken expects that under MiCA, many stablecoins currently available in the EU will be delisted.

“This is an evolving picture. What we are clear about is that the range of types and numbers of stablecoins currently available in Europe is unlikely to be available in the future,” Hughes added. “At some point in the future there will be a disconnect where that becomes impossible. “Much of it will depend on which assets are properly registered within the European Union under the e-money regime.”

As European banking authorities finalize technical standards for MiCA, exchanges like Kraken are preparing for a future where the current range of stablecoins may not be sustainable in Europe.

Another major cryptocurrency exchange, OKX, already restricted USDT functionality in the EU earlier this year.