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MiCA’s Looming Deadline: Cryptocurrency Exchanges Upend Stablecoins
The European Union’s Cryptocurrency Markets Regulation (MiCA) will come into force on June 30, which is just three days from now. As a result, many cryptocurrency exchanges offering services on the block are already taking measures, primarily by eliminating 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 cryptocurrency exchange in terms of trading volume.
Cryptocurrency exchanges have abandoned stablecoins
At least four cryptocurrency exchanges have confirmed they are restricting access to some stablecoins to users within the EEA. Bitstamp was the latest to confirm on Wednesday that it would delist its euro-denominated stablecoin, EURT, ahead of a June 30 deadline.
EURT is a EUR-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 cryptocurrency exchanges to list EURT in November 2021.
“Electronic money tokens (EMTs) that are not denominated in euros and are already available on exchanges but do not fall under the MiCA regulation, will not be removed from the list, although their availability to European customers will be limited on some products.” Bitstamp he wrote in his ad.
“Bitstamp will not list new EMTs that do not meet the MiCA requirements, nor will it engage in any marketing activities for them.”
Another big name that will be moving ahead of MiCA is Binance. As previously reported by Finance Magnates, The cryptocurrency exchange has already blocked access to some servicesincluding copy trading. It will also bring further restrictions, including the restriction on purchasing unauthorized stablecoins and limiting new loans and unauthorized stablecoin transfers in margin trading.
Uphold, another Ripple-linked cryptocurrency exchange, 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 30th
Similar to MiFID, Not will bring cryptocurrency services to the EU under a single regulatory umbrella. The regulation will impact the distribution of cryptocurrencies in the block, meaning both retail and institutional traders will be affected in one way or another.
With the approval of the European Parliament in 2023, MiCA will be implemented in two phases: Stablecoin rules will come into effect on June 30, 2024 and then the broader compliance on exchanges and wallets which will come into force from 30 December 2024.
According to MiCA, fiat-backed stablecoins in the block would be classified as “electronic 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 its purview, requiring them to maintain value.
The regulations would also limit the daily limit on non-euro-pegged stablecoin transactions to just $1 million.
“As the world’s longest-running 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, UK Managing Director at Bitstamp. “We are communicating directly with the small percentage of our clients whose asset mixes are affected.”
The exchanges have been in preparation for months
Some cryptocurrency exchanges had already taken steps to comply with MiCA earlier this year. In March, OKX confirmed the deletion of USDT pairs from the EEA, without mentioning MiCA. “Please note that not all tokens are available in all markets due to regulatory requirements,” noted an email sent by the exchange to its European customers.
It is interesting to note that The Kraken It also reviewed USDT pairs offered in the EU and considered delisting them to comply with MiCA, according to a Bloomberg report in March. However, following the report, Kraken’s Global Head of Asset Growth and Management, Mark Greenberg, clarified that the exchange “continues to list USDT in Europe and we have no plans to delist at this time.”
“We know our European customers value access to USDT and we continue to evaluate all options to offer USDT under the next regime,” he added. “We will of course comply with all legal requirements, even those we disagree with. But the rules are not set yet and we continue to do everything we can to continue to offer all relevant stablecoins to our European customers.”
So far, Kraken has not announced anything official about delisting any stablecoin pairs to comply with MiCA.
Interestingly, a recent report revealed that only 9% of cryptocurrency companies, out of 68 surveyed, are fully compliant with MiCA requirements, while another 25 percent have yet to begin preparations.
The European Union’s Cryptocurrency Markets Regulation (MiCA) will come into force on June 30, which is just three days from now. As a result, many cryptocurrency exchanges offering services on the block are already taking measures, primarily by eliminating 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 cryptocurrency exchange in terms of trading volume.
Cryptocurrency exchanges have abandoned stablecoins
At least four cryptocurrency exchanges have confirmed that they are restricting access to some stablecoins to users within the EEA. Bitstamp was the latest to confirm on Wednesday that it would delist the euro-denominated stablecoin, EURT, ahead of the June 30 deadline.
EURT is a stablecoin pegged to the EUR issued by Tether, the company behind the most popular stablecoin, USDT, with a market capitalization of over $112.7 billion. Interestingly, Bitstamp became one of the first cryptocurrency exchanges to list EURT in November 2021.
“Electronic money tokens (EMTs) that are not denominated in euros and are already available on exchanges but do not fall under MiCA regulation, will not be delisted, although their availability to European customers will be limited on certain products,” Bit stamp he wrote in his ad.
“Bitstamp will not list new EMTs that do not meet the MiCA requirements, nor will it engage in any marketing activities for them.”
Another big name moving ahead of MiCA is Binance. As previously reported by Finance Magnates, the cryptocurrency exchange has already blocked access to some servicesincluding copy trading. It will also bring additional restrictions, including the restriction on purchasing unauthorized stablecoins and limiting new loans and unauthorized stablecoin transfers in margin trading.
Uphold, another Ripple-related cryptocurrency exchange, also confirmed it was delisting six stablecoins, including the popular USDT, for European users. However, it will continue to support USDC, EURC, and PYUSD.
Respect the MiCA from June 30th
Similar to MiFID, Not will bring cryptocurrency services to the EU under a single regulatory umbrella. The regulation will impact the distribution of cryptocurrencies in the block, meaning both retail and institutional traders will be affected in one way or another.
With the approval of the European Parliament in 2023, MiCA will be implemented in two phases: Stablecoin rules will come into effect on June 30, 2024 and then the broader compliance on exchanges and wallets that will come into effect on December 30, 2024.
Under MiCA, fiat-backed stablecoins in the block would be classified as “electronic 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 include algorithmic stablecoins, requiring them to maintain value.
The regulations would also limit the daily transaction limit for non-euro stablecoins to just $1 million.
“As the world’s longest-running cryptocurrency exchange, we have consistently advocated for a proportionate response to regulation that protects consumers while allowing cryptocurrency to continue to mature as an asset class,” said James Sullivan, UK Managing Director at Bitstamp. “We are communicating directly with the small percentage of our customers whose asset mixes are affected.”
The exchanges have been preparing for months
Some cryptocurrency exchanges were already taking steps to comply with MiCA earlier this year. In March, OKX confirmed the delisting of USDT pairs from the EEA, without mentioning MiCA. “Please note that not all tokens are available in all markets due to regulatory requirements,” an email the exchange sent to its European clients noted.
It is interesting to note that The kraken It also reviewed USDT pairs offered in the EU and considered delisting them to comply with MiCA, according to a Bloomberg report in March. However, following the report, Kraken’s Global Head of Asset Growth and Management, Mark Greenberg, clarified that the exchange “continues to list USDT in Europe and we have no plans to delist at this time.”
“We know our European customers value access to USDT and we continue to explore all options to offer USDT under the next regime,” he added. “We will of course follow all legal requirements, even those we disagree 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 announced anything official about delisting any stablecoin pairs to comply with MiCA.
Interestingly, a recent report revealed that only 9% of cryptocurrency companies, out of 68 surveyed, are fully compliant with MiCA requirements, while another 25% have yet to begin preparations.