Uphold, a New York-based crypto exchange and Ripple ODL partner will stop supporting several stablecoins, including Tether (USDT), Dai (DAI), and Frax Protocol (FRAX), in preparation for the upcoming Markets in Crypto Assets (MiCA) regulations in the European Economic Area (EEA).
This decision, conveyed by Ripple’s CBDC Strategic Advisor Antony Welfare, also affects the Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD), effective July 1, 2024. Users must convert their holdings by June 27 to avoid automatic conversion into USDC on June 28.
MiCA regulations require stablecoin issuers to be licensed as Electronic Money Institutions (EMIs) or credit institutions, which could benefit euro-backed stablecoins while creating uncertainty for others.
The regulations aim to clarify and enhance transparency in Europe’s cryptocurrency market. Tom Kiddle of Palisade noted that while MiCA offers clarity crucial for innovation, its stringent requirements might be challenging for smaller firms but are necessary for consumer protection.
As MiCA takes effect, USDC might become the preferred stablecoin in Europe due to its compliance readiness. Binance has adopted a sell-only policy for unauthorized stablecoins, and OKX has stopped supporting USDT trading pairs in the EU, continuing with USDC and euro-based pairs.
Kraken is still assessing Tether’s compliance with the new regulations. Overall, MiCA is set to significantly impact the European crypto market, especially benefiting euro-backed stablecoins.
Image Credit: Pixabay
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