In an exclusive interview with crypto.news, Natalia Latka, Policy Director at Merkle Science, explores the potential impact of the MiCA regulation on stablecoins like USDT in the EU.

Recently, OKX, a leading global crypto exchange, delisted all USDT trading pairs in anticipation of the forthcoming Markets in Crypto-Assets Regulation (MiCA). With MiCA set to take effect in June, speculation abounds regarding the response of other major exchanges.

MiCA introduces licensing for crypto-asset service providers (CASPs), issuers of asset-referenced tokens (ARTs), and issuers of electronic money tokens (EMTs). It imposes stringent regulatory obligations, including consumer protection rules and a market abuse regime. Only authorized legal entities with offices in the EU can provide crypto-asset services, subjecting significant providers to heightened scrutiny.

To unravel this complex narrative, crypto.news turned to Natalia Latka, a leader in crypto compliance and policy. She elaborated on how MiCA will affect USDT and other stablecoins.

Regarding USDT, classified as an EMT, compliance entails meeting rigorous criteria and obtaining authorization as an electronic money institution or credit institution. Given USDT's size, it may be deemed a significant EMT, necessitating stricter requirements such as higher capitalization and liquidity standards.

Operational limitations for stablecoins operating in the EU will depend on transaction volumes, with significant issuers facing regulatory action if thresholds are exceeded. Additionally, MiCA imposes restrictions on non-EU currency-denominated stablecoins, compelling issuers to cease issuance upon surpassing certain limits.

OKX's decision to delist USDT may foreshadow broader shifts in Europe, as exchanges anticipate regulatory scrutiny and seek alignment with MiCA. While MiCA's impact is primarily regional, it may influence global standards for stablecoin regulation.