Cryptocurrency exchange Uphold has announced that it will delist six popular stablecoins for its European users by July 1. This move is to comply with the European Union’s Markets in Crypto-Assets Regulation (MiCA), which aims to bring tighter control over the crypto market.
The stablecoins being delisted are Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD). Users must convert these stablecoins to other cryptocurrencies by June 28. After this date, Uphold will automatically convert any remaining holdings into USD Coin (USDC).
MiCA, which became law in May 2023 and partially took effect in June 2023, imposes strict regulations on stablecoins, especially those backed by fiat currency. These regulations will fully apply across the European Economic Area by the end of 2024.
Starting June 30, MiCA’s stablecoin regulations will require fiat-backed stablecoins to maintain a 1:1 reserve ratio and ensure these reserves are held by a third-party custodian. The rules also prohibit algorithmic stablecoins, aiming to boost consumer trust by ensuring stablecoins are reliable for value storage and payments.
Under MiCA, stablecoin issuers in the EU must be licensed as credit institutions or Electronic Money Institutions. While this could challenge some stablecoins, those backed by the euro may find favorable conditions under the new regulations.
Uphold isn’t the only exchange making changes. Binance has also revised its stablecoin listings to comply with MiCA, categorizing them into “regulated” and “unauthorized” groups. However, Binance has not yet specified which stablecoins fall into each category. Earlier this year, OKX delisted Tether in Europe, and Kraken is currently evaluating its support for USDT in the region.
These regulatory adjustments highlight the evolving landscape of crypto regulations in Europe, impacting both exchanges and stablecoin issuers. The new framework aims to create a more secure and reliable market for digital assets, enhancing investor confidence and market stability.