Cryptocurrency exchange Uphold has notified its European users that it will end support for six popular stablecoins starting July 1.
This decision aligns with the European Union’s Markets in Crypto-Assets Regulation (MiCA).
The six stablecoins affected are Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users holding these stablecoins must convert them to a different cryptocurrency by June 28.
After this date, Uphold will automatically convert any remaining holdings into USD Coin (USDC).
MiCA, passed into law in May 2023 and partially effective since June 2023, aims to fully enforce its extensive EU crypto laws by the end of 2024.
The stablecoin regulations will come into effect in the European Economic Area on June 30, prompting exchanges like Uphold to adjust their market listings to comply.
MiCA imposes stringent regulatory requirements on fiat-backed stablecoins and e-money tokens that exceed a predetermined adoption threshold, evaluated by seven quantitative and qualitative indicators.
This places the European Banking Authority in charge of these tokens instead of the national authorities of EU member states.
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The regulation mandates fiat-backed stablecoins to be backed by a 1:1 ratio of liquid reserve. Issuers must maintain a reserve of assets held by a third party, separate from other assets.
The rule also bans algorithmic stablecoins. These measures aim to boost consumer confidence by ensuring stablecoins can reliably serve as a store of value and a payment method.
Under MiCA, stablecoin issuers in the EU must hold licenses as credit institutions or Electronic Money Institutions.
While some stablecoins face uncertainty, euro-backed stablecoins could benefit from the new regulations.
Besides Uphold, other major crypto exchanges like Binance have also adjusted their stablecoin listing policies to comply with MiCA.
Binance categorized its stablecoins into “regulated” and “unauthorized” but has not yet finalized which qualify as regulated.
In March, OKX delisted Tether in Europe without mentioning MiCA, and Kraken is still deciding whether to continue supporting USDT in the region.
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