Cryptocurrency exchange Uphold sent a notice to its European users informing them that the platform will discontinue support for six popular stablecoins starting July 1. Crypto exchanges are delisting these stablecoins to comply with European crypto regulations called the Crypto Asset Markets (MiCA) new stablecoin framework.
Upbit announced its cryptocurrency delist decision
European Union cryptocurrency regulations are challenging crypto exchanges and stablecoin issuers. Cryptocurrency exchange Uphold announced to its European users that it will discontinue support for six popular stablecoins starting July 1. The reason for this delisting is the new framework of the European Union’s Crypto Asset Markets (MiCA) regulations, which became law and partially entered into force in May 2023, especially regarding stablecoins.
Stablecoins that Uphold will end support for include Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP) and TrueUSD (TUSD). Users who hold these stablecoins will have to convert them to a different cryptocurrency by June 28. Otherwise, the exchange will automatically convert the stablecoins in question to USD Coin (USDC).
What does MiCA mean?
Within the scope of MiCA, stablecoin regulations begin to be implemented in the European Economic Area (EEA) as of June 30. Crypto exchanges like Uphold are making significant changes to their market listings to comply with these regulations. MiCA introduces stricter and additional regulatory rules for fiat-backed stablecoins and e-currency tokens whose reputation exceeds a set of pre-determined criteria consisting of seven quantitative and qualitative indicators. This situation transfers the tokens in question to the responsibility of the European Banking Authority (EBA), rather than the national authorities of the EU member states, unlike the previous practice.
The new regulations require fiat-backed stablecoins to be backed 1:1 by liquid reserves and require issuers to create and manage a reserve whose assets are held in the custody of a third party and separate from other assets. It also bans algorithmic stablecoins entirely. The aim of these safeguards is to increase consumer confidence in cryptocurrencies by ensuring that stablecoins can be used as a reliable store of value and payment method.
Importance of EMI license
Under the MiCA framework, institutions issuing stablecoins in the EU must have a credit institution or electronic money institution (EMI) licence. While the status of some stablecoins remains uncertain, it is anticipated that stablecoins backed by the euro will become more popular under the new regulations.
As Kriptokoin.com reported, in addition to Uphold, other major crypto exchanges such as Binance also updated their stablecoin listing policies as part of the MiCA compliance process earlier this month. Based on compliance with the new rules, Binance divided stablecoins into two categories: “regulated” and “unregulated”. However, Binance has not yet decided which crypto stablecoins will be considered “regulated”. This situation differs from Uphold’s approach. In previous months, OKX delisted Tether in Europe without citing MiCA. Kraken, on the other hand, is evaluating whether Tether will continue to support USDT.
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