Many cryptocurrency exchanges such as Uphold, Binance and OKX have moved to change their stablecoin policies in Europe, in order to meet compliance requirements for the cryptocurrency market regulatory framework (MiCA).
Uphold is one of the leading cryptocurrency exchanges in Europe with the most drastic moves. They announced that they will stop supporting six popular stablecoins including USDT, TUSD, DAI, FRAX, GUSD and USDP from July 1, to comply with MiCA requirements.
Meanwhile, Binance took a different approach to complying with the new regulation by dividing stablecoins into two categories: “regulated stablecoins” and “unlicensed stablecoins.” Stablecoins in the second category will only be available to users in Europe in “sale only” mode.
Notably, OKX has officially stopped supporting USDT trading pairs in Europe, and Kraken is reconsidering the possibility of supporting Tether stablecoins in the region. In particular, a complete ban on the use of algorithmic stablecoins in the EU will directly affect stablecoins such as DAI and FRAX, which rely on algorithms to maintain their value.
This change has raised concerns about the potential impact on investors. According to statistics from CoinGecko, stablecoin trading volume accounts for more than 60% of total trading volume on major cryptocurrency exchanges. If the above popular stablecoins are banned, it could cause investors in Europe to shift to other exchanges or other financial markets, affecting trading volume and trust in the market. cryptocurrency market.
Tighter management of stablecoins is expected to help increase stability and transparency for the cryptocurrency market in the EU, but the process of transitioning and adapting to new laws will be a challenge for exchanges, stablecoin issuers and investors, and may also cause stablecoin issuers to seek to relocate operations out of the region.
MiCA was adopted by the European Parliament in April 2023. New regulations for stablecoins will take effect in the European Economic Area on June 30. As a result, cryptocurrency exchanges are rushing to bring their platforms into compliance with the new regulations.
