European digital asset trading platform Uphold will stop supporting six stablecoins starting from July 1 due to the region’s new crypto-facing regulatory framework, the Markets in Crypto-Assets Act (MiCA).
In a recent post on X (formerly Twitter), Antony Welfare, founder of the Commercialising Blockchain Research Centre (CBRC), shared a screenshot of an email received from Uphold, in which it announced that it would no longer support USDT, GUSD, DAI, FRAX, TUSD, and USDP.
According to the screenshot, the digital asset trading platform cited “new European Union rules on stablecoins” as the reason for this decision. It added that users holding these stablecoins must convert them to another cryptocurrency by June 28. After this date, Uphold will automatically convert these assets into USD Coins (USDC).
As of press time, Uphold has not made any public statements regarding this change.
MiCA was passed into law in May 2023 and partially went into effect in June 2023, with full implementation expected by the end of 2024. The regulatory framework introduced stricter requirements for fiat-backed stablecoins and e-money tokens that meet specific adoption criteria. This includes a mandate for stablecoins to be backed by a 1:1 ratio of liquid reserves, with these reserves held in custody by a third party.
Algorithmic stablecoins are prohibited under the new regulations. The regulation also requires stablecoin issuers in the region to hold licences as credit institutions or Electronic Money Institutions.
These regulations relating to stablecoin will take effect in the European Economic Area on June 30. As a result, crypto exchanges like Uphold are adjusting their market listings to comply with these new rules. Earlier in June, Binance categorised its stablecoins into “regulated” and “unauthorised” groups but has not yet finalised which of these tokens fall into each category.
In March, OKX delisted Tether‘s USDT in Europe without mentioning MiCA.
In mid-May, there were reports that Kraken, a U.S.-based crypto exchange, was considering delisting Tether’s stablecoin, USDT. However, Kraken’s global head of asset growth and management, Mark Greenberg, has denied these rumours. He said the exchange is still exploring ways to offer USDT under the new regulations.
Meanwhile, while some stablecoins face challenges under MiCA, those backed by the euro could benefit from the new rules. This has raised worries among some crypto leaders. Tether’s CEO, Paolo Ardoino, told The Block that MiCA might not only complicate the role of stablecoin issuers but also increase the risks for EU-licensed stablecoins.
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