Uphold Ends Support for Six Stablecoins following New EU Crypto Regulations
Summary:
Uphold, a cryptocurrency exchange, has informed its European clients that it will discontinue support for six major stablecoins from July 1 in compliance with the Markets in Crypto-Assets (MiCA)'s new stablecoin regulations. Affected stablecoins include Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users need to convert these into a different cryptocurrency by June 28. The MiCA regulations, which enforce stricter requirements on fiat-backed stablecoins and eMoney tokens, will be implemented in the European Economic Area on June 30, prompting exchanges to modify their market listings in compliance.
Uphold, a well-known cryptocurrency exchange, has communicated to its European clients that effective July 1, the platform will discontinue offering six prominent stablecoins. This measure amid crypto exchanges is to ensure consistency with European cryptocurrency rules, specifically the Markets in Crypto-Assets (MiCA)'s novel stablecoin framework. The stablecoins affected include Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users in possession of these stablecoins are advised to transition them to an alternative cryptocurrency by June 28, post which Uphold will automatically transform them into USD Coin (USDC).
Enacted in May 2023, followed by partial implementation in June 2023, the comprehensive MiCA legislation, a product of Europe's vast cryptocurrency legal structure, is projected to be fully operational by the conclusion of 2024.
The newly introduced MiCA stablecoin regulations will come into effect in the European Economic Area (EEA) on June 30. Crypto exchanges such as Uphold are consequently making significant modifications to their market offerings to adhere to the new laws.
Imposed by MiCA, these laws enhance regulatory requirements on fiat-backed stablecoins and eMoney tokens that have surpassed a specified adoption level. This is determined through a combination of seven qualitative and quantitative indicators and switches the jurisdiction over these tokens from national EU authorities to the European Banking Authority (EBA).
Further requirements include a 1:1 accountability of liquid reserves backing fiat-stablecoins and the necessity for issuers to establish and manage a reserve stash segregated from other assets that are overseen by a third party. The regulation unequivocally restricts algorithmic stablecoins, providing a boost to customer faith in virtual currencies by verifying the use of stablecoins as an investment and payment tool.
Stablecoin issuers in the EU are now obliged to have licensure as credit establishments or Electronic Money Institutions (EMIs) under the MiCA guidelines. While the future of some stablecoins hangs in the balance, it is forecasted that Euro-backed ones will flourish under the revised rule structure.
Beyond Uphold, additional prominent crypto exchanges such as Binance are revising their stablecoin listing protocols to conform to MiCA regulations. For instance, Binance classified its stablecoins into 'regulated' and 'unauthorized' based on compliance, yet it remains unclear which stablecoins fall into either category. OKX also delisted Tether in Europe earlier in March, absent any reference to MiCA, while Kraken contemplates supporting Tether's USDT.
Published At
6/18/2024 10:13:54 AM
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