Uphold Delisting 6 Stablecoins, Including USDT, by July 1st
Uphold, a cryptocurrency exchange, recently announced to its European clientele that it will cease supporting six widely-used stablecoins from July 1, aligning its operations with the European Union’s Markets in Crypto-Assets Regulation (MiCA).
This decision affects stablecoins such as Tether, Dai, Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD).
Introduction to MiCA Regulations
Uphold has mandated that its users must either convert these stablecoins into alternative cryptocurrencies by June 28 or allow the platform to automatically exchange them for USD Coin.
MiCA, which was enacted into law in May 2023 and partially implemented in June 2023, aims to be fully operational by the end of 2024. This sweeping legislation introduces rigorous regulatory standards for fiat-backed stablecoins and electronic money tokens that achieve a certain adoption level.
The criteria for this level are determined by seven specific quantitative and qualitative indicators. One significant shift under MiCA is the transfer of regulatory authority from the national bodies of EU member states to the European Banking Authority.
The new rules are designed to enhance the stability and reliability of the crypto market. They require that all fiat-backed stablecoins must be supported by a 1:1 ratio with liquid reserves and that these reserves be maintained in a segregated account, managed by a third party, and isolated from other financial assets.
Additionally, MiCA categorically bans algorithmic stablecoins, which do not adhere to these strict guidelines. The overarching goal of these regulations is to bolster consumer confidence in digital currencies, ensuring that stablecoins function reliably both as stores of value and mediums of exchange.
Under the MiCA framework, stablecoin issuers must now be licensed either as credit institutions or Electronic Money Institutions. While this regulatory environment poses challenges for some stablecoins, it potentially favors those backed by the euro, which may thrive under the new rules.
Responses from Major Cryptocurrency Exchanges
In response to MiCA, other major cryptocurrency exchanges have also been adjusting their stablecoin policies. For instance, Binance reclassified its stablecoin offerings into “regulated” and “unauthorized” categories earlier in June to align with MiCA’s stipulations.
However, Binance has not yet finalized which stablecoins fall into these categories. In contrast, OKX opted to delist Tether in Europe in March without explicitly attributing the decision to MiCA. Meanwhile, Kraken is currently assessing whether to continue supporting USDT in the European market.
These policy revisions across various platforms illustrate the broader impact of MiCA on the cryptocurrency landscape in Europe. As exchanges adapt to these stringent new regulations, the stablecoin market is set to undergo significant transformations, potentially leading to a more stable and reliable digital currency environment.
The post Uphold Delisting 6 Stablecoins, Including USDT, by July 1st appeared first on Coinfomania.
