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The crypto sector is experiencing explosive growth and attracting more and more investors. However, regulation is necessary and the EU's MiCA legal framework will come into force from 2024. In the face of these new regulations, Kraken is seriously considering withdrawing stablecoin Tether (USDT) from its European services.
Kraken, the leader in crypto compliance
In anticipation of the new MiCA regulations, Kraken recently revealed that it is seriously considering withdrawing its stablecoin Tether (USDT) from its European services. This major change is far from a trivial decision and demonstrates the platform's determination to proactively address future regulatory obligations.
The spokesperson emphasized, “We are absolutely prepared for all possible contingencies,'' which is a far cry from the defensive stance of some crypto currency people who question the legitimacy of MiCA. emphasized the approach.
Critical challenges for stablecoins
At the heart of Kraken's concerns are MiCA's strict new rules that specifically target stablecoins deemed “critical” by European regulators. This is especially true for the USDT token issued by Tether, which has a market capitalization of over $80 billion. For these major stablecoins, the European document sets a strict cap of 200 million euros for daily transactions. A restrictive framework that could significantly hinder widespread use as an entry point to cryptocurrencies.
But that's not all! The new regulations will also require issuers to hold at least 60% of their reserves in the form of traditional bank deposits. This is a complex obligation, according to Tether head Paolo Ardoino, who stressed that it is difficult to find banks willing to accept this type of cryptocurrency transaction.
Aside from the specific case of Kraken, this wave of regulatory adjustments in the cryptocurrency ecosystem appears to be more than just a flash in the pan. Competitive platform OKX also suspended USDT trading in the European Economic Area last March in anticipation of the introduction of MiCA.
Regulatory compliance headaches are very real today for cryptocurrency-related actors, especially for powerful players like Kraken. But rather than endure this as a constraint, some choose to get ahead of it and embrace it to better embrace this new regulatory era.
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Adapt to society and live a safe life to survive in universities around the world. Community managers manage the underlying cryptocurrencies and work on blockchain and its development. Experience and fair management should be passionately considered in the domain and article information and contract.
Disclaimer
The views, ideas and opinions expressed in this article are solely those of the author and should not be construed as investment advice. Please do your own research before making any investment decisions.
