Other significant cryptocurrency exchanges, such as Binance, Kraken, and OKX, modified their stablecoin listing policies in addition to Uphold in order to abide with MiCA rules. Uphold, a cryptocurrency exchange, has notified its users in Europe that, as of July 1, it will no longer support six well-known stablecoins.
According to Uphold, the stablecoins will be taken off the market in accordance with the Markets in Crypto-Assets Regulation (MiCA) of the European Union. Tether Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP), TrueUSD (TUSD), and Pax Protocol (PXP) are the six stablecoins. Before June 28th, holders of these stablecoins must exchange them for another cryptocurrency; else, the cryptocurrency exchange will automatically convert them into US dollars. $1 coin. MiCA was passed into law in May 2023 and went into partial effect in June 2023. The extensive EU crypto laws are expected to come into full force by the end of 2024.
MiCA’s stablecoin rules will go into effect in the European Economic Area on June 30. To abide by these rules, cryptocurrency exchanges such as Uphold and others are implementing significant modifications to their market listings.
MiCA imposes new and more stringent regulatory restrictions on e-money tokens and fiat-backed stablecoins that, based on a set of seven quantitative and qualitative metrics, have surpassed a predefined acceptance threshold. This transfers control of the tokens from national authorities of EU member states to the European Banking Authority.
The regulation expressly prohibits fiat-backed stablecoins in addition to requiring issuers to establish and maintain a reserve of assets kept in custody by a third party apart from other assets. These safeguards are intended to increase consumer confidence in digital currencies by ensuring that stablecoins can be used as a store of value and for payments in a dependable manner.
Accordingly, stablecoin issuers in the EU are required by the MiCA framework to possess licences as Electronic Money Institutions or Credit Institutions. Stablecoins backed by the euro could prosper under the new restrictions, but other stablecoins risk uncertainty.
In addition to Uphold, several other significant cryptocurrency exchanges, such as Binance, modified their stablecoin listing guidelines earlier in June in order to abide by MiCA requirements. In accordance with the new regulations, Binance separated its stablecoins into “regulated” and “unauthorised” coins. In contrast to Uphold, Binance has not yet determined which cryptocurrency stablecoins are authorised and which are not. While Kraken is debating whether to keep supporting USDT in the region, OKX likewise delisted Tether in Europe in March without mentioning MiCA.