Cryptocurrency exchange Uphold has announced that it will stop supporting six popular stablecoins for its European users starting July 1. This decision aligns with the European Union’s new Markets in Crypto-Assets Regulation (MiCA).
Stablecoins Affected by Uphold’s New Rule
The stablecoins being delisted are:
– Tether (USDT)
– Dai (DAI)
– Frax Protocol (FRAX)
– Gemini dollar (GUSD)
– Pax dollar (USDP)
– TrueUSD (TUSD)
Uphold has advised users holding these stablecoins to convert them to another cryptocurrency by June 28. After this date, Uphold will automatically convert any remaining balances into USD Coin (USDC).
The New MiCA Framework
MiCA was passed into law in May 2023 and partially came into effect in June 2023. The full implementation is expected by the end of 2024. On June 30, MiCA’s stablecoin regulations will be enforced in the European Economic Area.
MiCA imposes strict rules on fiat-backed stablecoins and e-money tokens that meet certain adoption criteria. These rules transfer oversight from national authorities to the European Banking Authority.
MiCA requires fiat-backed stablecoins to maintain a 1:1 ratio of liquid reserves. Issuers must hold these reserves in custody, separate from other assets. The regulation also bans algorithmic stablecoins. These measures aim to boost consumer confidence by ensuring stablecoins are reliable for storing value and making payments.
Under MiCA, stablecoin issuers in the EU must be licensed as credit institutions or Electronic Money Institutions. While this brings uncertainty for some stablecoins, those backed by the euro may benefit from the new regulations.
Other Exchanges Adjusting Policies
Uphold is not alone in making these changes. Other major crypto exchanges are also updating their policies to comply with MiCA. For example, Binance has categorized its stablecoins into “regulated” and “unauthorized” groups, but has yet to finalize which coins fall into each category.
In March, OKX delisted Tether in Europe without citing MiCA. Kraken is also reviewing its support for USDT in the region.
These moves indicate a significant shift in the European crypto market as exchanges adapt to the new regulatory landscape.
