European cryptocurrency users are facing a shakeup as Uphold, a major crypto exchange, announced it will delist six popular stablecoins from its platform starting July 1st. This move comes in response to the European Union’s recently implemented Markets in Crypto-Assets Regulation (MiCA).
The delisting affects major stablecoins like Tether (USDT), Dai (DAI), and USD Coin (USDC). Uphold users holding these coins must convert them to other cryptocurrencies by June 28th. Otherwise, the exchange will automatically convert them to USDC after the deadline.
MiCA, passed in May 2023, aims to bring greater regulatory oversight to the crypto industry within the European Economic Area (EEA). The regulation, partially in effect since June 2023, will fully kick in by year’s end. With MiCA’s stablecoin rules coming into force on June 30th, exchanges like Uphold are scrambling to comply.
The new regulations impose stricter requirements on fiat-backed stablecoins, those pegged to traditional currencies like the Euro or US dollar. These include a mandatory 1:1 reserve ratio, with issuers required to hold liquid assets in a separate, third-party custody account. Notably, MiCA bans algorithmic stablecoins – those that rely on complex algorithms to maintain their peg.
These safeguards aim to bolster consumer confidence in stablecoins as a reliable store of value and medium of exchange. Additionally, MiCA requires stablecoin issuers in the EU to obtain licenses as credit institutions or Electronic Money Institutions.
Also Read: Tether Launches Alloy by Tether, a Gold-Backed Innovation for Stablecoins
Uphold isn’t alone in adapting to MiCA. Binance, another major crypto exchange, recently adjusted its stablecoin listings to comply. However, unlike Uphold, Binance hasn’t yet classified its stablecoins as “regulated” or “unauthorized.” Other exchanges like OKX have delisted Tether in Europe, while Kraken is still evaluating its support for USDT in the region.
MiCA represents a significant shift for the European crypto landscape. While some stablecoins face an uncertain future, those backed by the Euro could potentially thrive under the new regulatory framework. With stricter regulations in place, the European crypto scene is likely to experience further changes in the coming months.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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