Uphold, a cryptocurrency exchange, has notified its European users that it will no longer support six popular stablecoins starting from July 1. This decision is in accordance with the Markets in Crypto-Assets Regulation (MiCA) of the European Union.
The stablecoins being delisted are Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users holding these stablecoins are required to convert them to a different cryptocurrency before June 28. After this date, Uphold will automatically convert them into USD Coin (USDC).
MiCA, which was passed into law in May 2023 and partially implemented in June 2023, is a comprehensive set of EU crypto laws that are expected to be fully enforced by the end of 2024.
The new stablecoin framework under MiCA will come into effect on June 30 in the European Economic Area. Uphold and other crypto exchanges are adjusting their market listings to comply with these regulations.
MiCA imposes stricter regulatory requirements on fiat-backed stablecoins and e-money tokens that have reached a certain adoption threshold. These requirements are determined by a set of seven indicators, and the European Banking Authority will oversee the tokens instead of national authorities.
In addition to the 1:1 liquid reserve backing for fiat-backed stablecoins and the requirement for issuers to maintain reserves held by a third party, MiCA prohibits algorithmic stablecoins. These measures aim to enhance consumer trust in digital currencies by ensuring the reliability of stablecoins for value storage and payments.
Under the MiCA framework, stablecoin issuers in the EU must obtain licenses as credit institutions or Electronic Money Institutions. While some stablecoins face uncertainty, those backed by the euro could see success under the new regulations.
Several other major crypto exchanges, such as Binance, have adjusted their stablecoin listing policies to comply with MiCA. Binance has categorized stablecoins as “regulated” and “unauthorized” based on the new rules, although the specific classification of each stablecoin is yet to be determined. OKX delisted Tether in Europe earlier this year, while Kraken is evaluating its support for USDT in the region.
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