Uphold Set to Delist USDT and 5 Stablecoins Due to MiCA

Uphold Set to Delist USDT and 5 Stablecoins Due to MiCA

Cryptocurrency exchange Uphold has announced it will end support for six popular stablecoins by July 1, 2024, in order to comply with the European Union’s Markets in Crypto-Assets Regulation (MiCA). This move comes as part of a broader trend among major crypto exchanges adjusting their stablecoin listing policies to align with new EU regulations.

Stablecoins Affected and User Instructions

Uphold’s notice to its European users specifies that the following stablecoins will be delisted:

  • Tether (USDT)
  • Dai (DAI)
  • Frax Protocol (FRAX)
  • Gemini Dollar (GUSD)
  • Pax Dollar (USDP)
  • TrueUSD (TUSD)

Users holding these stablecoins must convert them to a different cryptocurrency by June 28, 2024. After this date, Uphold will automatically convert any remaining balances into USD Coin (USDC).

MiCA’s Impact on Stablecoins

MiCA, which was passed into law in May 2023 and partially took effect in June 2023, will fully come into force by the end of 2024. The regulation introduces a comprehensive framework for the crypto market within the European Economic Area (EEA), including strict guidelines for stablecoins.

Key Provisions of MiCA for Stablecoins:

  • Fiat-backed Stablecoins: Must maintain a 1:1 reserve of liquid assets held by a third party and isolated from other assets.
  • E-money Tokens: Subject to stringent regulatory oversight if they exceed specific adoption thresholds.
  • Algorithmic Stablecoins: Banned outright under the new regulations.

These measures are designed to enhance consumer confidence by ensuring stablecoins can reliably serve as a store of value and means of payment. Under MiCA, stablecoin issuers in the EU must obtain licenses as credit institutions or Electronic Money Institutions.

Changes in Crypto Exchange Policies

In response to MiCA, several major cryptocurrency exchanges have revised their stablecoin policies:

  • Binance: Divided its stablecoins into “regulated” and “unauthorized” categories but has not yet finalized which stablecoins fall into each category.
  • OKX: Delisted Tether (USDT) in Europe in March without specifically mentioning MiCA.
  • Kraken: Currently evaluating whether to continue supporting USDT in the region.

Potential Future for Euro-backed Stablecoins

While MiCA presents challenges for certain stablecoins, those backed by the euro might find favorable conditions under the new regulatory environment. The focus on strong reserves and regulatory compliance could make euro-backed stablecoins more appealing and reliable for consumers and investors.

Uphold’s decision to delist several major stablecoins is a direct response to the impending MiCA regulations. As the EU moves towards stricter oversight of the crypto market, exchanges and stablecoin issuers will need to navigate these changes carefully to ensure compliance and maintain user trust. The broader crypto community will be closely watching how these regulations impact market dynamics and the adoption of different stablecoin types within the European Economic Area.

MiEthereum is a technology publication with a focus on spotlighting founders and builders that are improving the world of technology
Recent Articles

How to Get Your First Job in Crypto