Kraken on Keeping USDT in Europe

Despite regulatory obstacles, Kraken, a leading cryptocurrency exchange, is determined to keep Tether's USD stablecoin (USDT) available in the European Union. Mark Greenberg, Kraken’s Global Head of Asset Growth & Management, addressed the issue on May 19, dismissing rumors about a possible delisting. Greenberg noted the high demand for USDT among European users and stated that Kraken is considering all options to keep it listed. However, he emphasized that the company will adhere to all legal requirements, which are still being finalized in Europe, making delisting a potential outcome.

The speculation about delisting began on May 17 following a Bloomberg report that Kraken was reviewing USDT's status under the upcoming Markets in Crypto-Assets (MiCA) regulations. These new rules will introduce detailed guidelines for digital assets in the EU, significantly impacting stablecoin issuers.

Kraken has recently partnered with DLT Finance for its operations in Germany, leading to the removal of several cryptocurrencies not supported by DLT Finance. This caused uncertainty, but Greenberg assured users that Kraken plans to “relist some of these assets soon.”

In a related move, OKX, another major crypto exchange, delisted USDT for users in the EU and the European Economic Area (EEA) in March. This decision aimed to boost euro-denominated liquidity in the region. OKX limited trading to USDC and euro pairs, while USDT could only be traded against USDC and the euro. OKX stated that the change would impact only a small portion of its user base. Despite the delisting, USDT is still available for deposit, withdrawal, and OTC trading for EEA users.

The actions by Kraken and OKX highlight the growing regulatory challenges stablecoins face in Europe. The EU is set to implement the MiCA framework later this year, establishing clear regulations for digital assets, including stablecoins. MiCA will require stablecoin issuers to be regulated as electronic money institutions, potentially making many current stablecoins illegal if they don’t comply.

Circle, the issuer of USDC and EURC, has proactively applied for an electronic money institution license in the EU to meet the new regulations. This step reflects a broader trend among stablecoin issuers to ensure compliance and continue offering their products legally.

In conclusion, Kraken’s commitment to keeping USDT available for its European users underscores the balance between market demand and regulatory compliance in the crypto sector. As the EU prepares to implement MiCA, exchanges, and stablecoin issuers must navigate these changes. Kraken's efforts to relist assets and adhere to legal requirements show its adaptive strategy. Similarly, OKX's adjustments and Circle's compliance measures indicate an industry trend towards meeting regulatory standards, ensuring the legal operation of digital assets in Europe.