European Panic: Kraken’s Possible Withdrawal of USDT – You Won’t Believe the Reason!
Sun 19 May 2024 ▪
3
min of reading ▪ by
The crypto sector is experiencing explosive growth, attracting more and more investors. However, regulation is necessary, hence the EU’s MiCA legal framework coming into effect from 2024. Faced with these new rules, Kraken is seriously considering withdrawing the stablecoin Tether (USDT) from its European offerings.
Kraken, a leader in crypto compliance
In anticipation of the new MiCA regulation, Kraken recently revealed that it is seriously considering withdrawing the stablecoin Tether (USDT) from its European offerings. Far from being a trivial decision, this major change illustrates the platform’s determined willingness to proactively address future regulatory obligations.
“We are absolutely preparing for all eventualities,” emphasized a spokesperson, highlighting a pragmatic and proactive approach, far from the defensive postures of some crypto actors questioning MiCA’s legitimacy.
A significant challenge for stablecoins
At the heart of Kraken’s concerns: MiCA’s new stringent rules specifically targeting stablecoins considered “significant” by European regulators. This is particularly the case with the USDT token issued by Tether, which has a market capitalization exceeding $80 billion. For these major stablecoins, the European text provides for a strict cap on daily transactions at 200 million euros. A restrictive framework that could seriously hinder their widespread use as an entry point to crypto.
But that’s not all! The new regulation would also require issuers to hold at least 60% of their reserves in the form of traditional bank deposits. A complex obligation according to Paolo Ardoino, the head of Tether, who highlights the difficulties in finding banks willing to accept this type of crypto activity.
Beyond Kraken’s specific case, this wave of regulatory adjustments in the crypto ecosystem seems far from being a mere flash in the pan. As early as last March, competing platform OKX also suspended USDT trading for the European Economic Area, in anticipation of MiCA’s implementation.
The regulatory compliance headache for crypto actors is very real today, especially for heavyweights like Kraken. However, rather than enduring it as a constraint, some are choosing to anticipate this new regulated era to better embrace it.
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Le monde évolue et l’adaptation est la meilleure arme pour survivre dans cet univers ondoyant. Community manager crypto à la base, je m’intéresse à tout ce qui touche de près ou de loin à la blockchain et ses dérivés. Dans l’optique de partager mon expérience et de faire connaître un domaine qui me passionne, rien de mieux que de rédiger des articles informatifs et décontractés à la fois.
DISCLAIMER
The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.
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