Due to increasing regulatory pressure in Europe, prominent cryptocurrency exchange Kraken has decided to delist the popular stablecoin Tether from its platform. However, it assures that this decision will not affect its users outside the region.
Kraken, a renowned digital asset exchange, recently announced that it will cease to offer Tether, a top rated stablecoin pegged to the U.S. dollar, to its European customers. The move is due to the ongoing regulatory pressure on digital asset service providers in the European market. This decision, made in the goal of achieving full compliance with the imminent Markets in Crypto Assets (MiCA) regulations, will not impact Kraken users outside of Europe.
Delisting Tether in Europe
The delisting decision, effective from Dec. 29, 2021, applies specifically to the USDT/EUR trading pair which will be removed entirely from the exchange platform. Traders from Europe will no longer be able to perform transactions with Tether in Euro pairings, however, other available crypto trading pairs will remain unaffected.
A Result of Regulatory Pressures
This shift by Kraken comes as a response to the increasing regulatory scrutiny of stablecoins, spearheaded by Europe’s forthcoming Markets in Crypto Assets (MiCA) regulations. MiCA, proposed by the European Commission, aims to regulate all crypto-asset services and issuers operating within the European Union. The aim of this new regulation is to ensure consumer protection and to mitigate potential risks associated with crypto transactions.
What Does This Mean for Users?
For European users, this decision could have multiple implications. Firstly, it limits their options for stablecoin trading and could potentially influence their trading strategies. Secondly, this development signals the growing regulatory pressures within the European crypto market, which could have further impacts on the availability of certain digital assets in the future.
The Future of Tether and Stablecoins in Europe
The future of Tether and other stablecoins in Europe is uncertain, with the regulatory landscape continuing to evolve. While the Kraken decision only affects European users at present, it does raise questions regarding adoption and use of stablecoins in other jurisdictions. Similarly, this development could potentially impact other crypto exchanges that operate within Europe, adding to the uncertainties over the future of stablecoins in the region.
Influence on the Crypto Market
The delisting of Tether from Kraken could potentially shake up the cryptocurrency market. Tether, as one of the largest and most commonly used stablecoins, plays a significant role in the cryptocurrency market. It acts as a safe haven for traders during periods of high market volatility by offering relative stability compared to other digital assets. With the absence of USDT, traders might need to adjust their strategies according to the available stablecoins.
