Uphold crypto exchange has notified its European users that the platform will cease supporting six prominent stablecoins on July 1 in compliance with MiCA regulations.
To comply with the European crypto regulations known as Markets in Crypto-Assets (MiCA) new stablecoin framework, crypto exchanges are delisting these stablecoins.
Tether, Dai, Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD) comprise the six stablecoins. Before June 28, users who possess these stablecoins must exchange them for a different cryptocurrency. Subsequently, the cryptocurrency exchange will automatically convert them into USD Coin.
In May 2023, the European Union’s comprehensive cryptocurrency law, MiCA, was enacted and began to be partially implemented in June 2023. The comprehensive EU crypto laws are anticipated to be implemented by 2024.
Stablecoin framework under MiCA
The European Economic Area (EEA) will implement MiCA’s stablecoin regulations on June 30. To adhere to these regulations, cryptocurrency exchanges such as Uphold and others are implementing significant modifications to their market listings.
Fiat-backed stablecoins and eMoney tokens that have exceeded a predetermined adoption threshold, as determined by a set of seven quantitative and qualitative indicators, are subject to additional and more stringent regulatory requirements by MiCA. The European Banking Authority (EBA) is now responsible for these credentials, rather than a national authority of the EU.
In addition to mandating that a 1:1 ratio of liquid reserve back fiat-backed stablecoins and that issuers establish and maintain a reserve of assets held in custody by a third party and isolated from other assets, the rule explicitly prohibits algorithmic stablecoins.
These measures aim to bolster consumer confidence in digital currencies by guaranteeing that stablecoins can be utilized as a dependable means of payment and as a reserve of value.
Consequently, stablecoin issuers in the EU must possess licenses as Electronic Money Institutions (EMIs) or credit institutions per the MiCA framework.
Although certain stablecoins are still uncertain, stablecoins backed by euros are expected to flourish under the new regulations.
Review of stablecoin policy by crypto exchanges
In addition to Uphold, other significant crypto exchanges, such as Binance, also changed their stablecoin listing policies earlier this month to adhere to MiCA regulations.
Binance categorized their stablecoins as “regulated” or “unauthorized” based on their adherence to the new regulations. Nevertheless, Binance has not yet determined which crypto stablecoins are permissible and which are not, in contrast to Uphold.
In March of this year, OKX also delisted Tether in Europe without mentioning MiCA, and Kraken is currently considering whether to support Tether’s USDT.
