The implementation of the Markets in Crypto-Assets (MiCA) regulation is imminent, and digital asset exchanges are gearing up to comply. The new law aims to safeguard investors, prevent financial crime, and ensure transparency. How are crypto exchanges reassessing the choices available to European traders in light of recent developments?
What is known about MiCA
The regulation of European stablecoins is set to take effect on 30 June, while the European Banking Authority (EBA) and the European Securities Market Authority (ESMA) are working on implementing the new regulations. MiCA requires stablecoin issuers to be registered within the EU. However, it remains unclear how the law will apply to decentralized and foreign issuers. EBA representatives have emphasized that there will be no grace period for stablecoins that are already entering the market.
How MiCA classifies stablecoins
Only a small percentage of European institutional funds have access to cryptocurrency, primarily due to regulatory uncertainty. However, the emergence of MiCA is expected to alleviate these concerns by encouraging leading EU banks to offer services such as custody, trading, and issuance of e-money tokens or stablecoins. MiCA also mandates that stablecoin issuers maintain sufficient reserves. The EBA will pay particular attention to the diversification of these funds and the elimination of conflicts of interest.
Which crypto exchanges are abandoning stablecoins in Europe
Uphold
Starting July 1, Uphold will cease supporting USDT, DAI, FRAX, GUSD, USDP, and TUSD stablecoins for users from the European Economic Area (EEA) to comply with MiCA requirements. Owners of stablecoins must convert them into other assets by June 28, or they will be automatically replaced with USD Coin (USDC). The platform will continue to support EURC from Circle and PYUSD from PayPal.
Binance
Binance announced that it will restrict access to unauthorized stablecoins for users in the EEA from June 30 in accordance with the provisions of the MiCA regulations. The exchange will introduce a phased plan for the transition to regulated assets and restrict access to unauthorized stablecoins across all of its products for EEA customers from June 30.
Kraken
Bloomberg recently reported that Kraken would stop supporting USDT in Europe in May. However, representatives of Tether, the issuer of USDT, stated that they want exchanges to maintain a stablecoin for the withdrawal of funds and deposits. Kraken later denied Bloomberg’s statement and confirmed that it will continue to serve payments and trading pairs with the USDT stablecoin in Europe.
OKX
Since March 14, OKX has deprived European users of trading pairs with the stablecoin USDT, likely due to the fact that MiCA includes a clause for the mandatory licensing of stablecoin operators. The crypto exchange does not have such permission, so it decided to be proactive and offer USDC as an alternative to USDT.
What is going to change in Europe with MiCA
For crypto investors, MiCA offers valuable regulatory insights that can shape the trajectory of digital asset regulation. MiCA is intended to bring clarity to one of the world’s largest markets, making the EU an even more attractive place for web3 companies to innovate and attract talent. Regulatory clarity drives innovation and market competitiveness, providing the confidence and certainty that both investors and businesses need.