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Summary
Kraken, a cryptocurrency exchange, is evaluating its support for Tether in light of the impending Markets in Crypto-Assets Regulation (MiCA) in the European Union.
Introduction
Cryptocurrency exchange Kraken is currently assessing potential changes to comply with the MiCA law following the upcoming implementation of new regulations. Tether’s CEO, Paolo Ardoino, has expressed opposition to the European rule.
Main Points
As per Bloomberg reports, Kraken is actively reviewing strategies to adhere to the MiCA framework, which will impact stablecoins and crypto service providers differently. Kraken’s global head of regulatory strategy, Marcus Hughes, mentions that they are preparing for various scenarios, including the possible delisting of USDT.
Tether has suggested that exchanges prioritize EUR liquidity for European users and maintain USDT as an on-ramp off-ramp solution. The MiCA law includes stringent compliance norms, with the European Banking Authority setting criteria to identify significant stablecoins, like USDT.
Paolo Ardoino, CEO of Tether, has criticized the MiCA regulations, stating that Tether has no intentions of complying with the law’s requirements. He particularly opposes the mandate for institutions to hold 60% of stablecoin reserves in cash. Meanwhile, Tether has recently minted $1 billion in USDT, raising its market cap above $110 billion.
Conclusion
The evolving regulatory landscape in the EU, especially with the MiCA law, is prompting Kraken to reassess its support for Tether, while Tether and its CEO express reservations about complying with the upcoming regulations.
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