Recently, there were rumors that the cryptocurrency exchange Kraken might stop supporting Tether's USDT for its European users. On May 18, Mark Greenberg, Kraken’s Head of Global Asset Growth and Management, took to social media platform X to dismiss these claims. He clarified that while Kraken might consider suspending USDT support in Europe, this would only happen if the stablecoin fails to meet the upcoming Markets in Crypto-Assets (MiCA) regulations set to take effect in July.

The Future of Tether

MiCA aims to establish clear rules for crypto asset developers and service providers, ensuring they comply with Anti-Money Laundering (AML) and Counter-Terrorist Financing (CTF) laws. The news has generated a buzz within the crypto community, highlighting the significance of USDT, which is the largest stablecoin and one of the most traded crypto assets, with a market value exceeding $110 billion and about 69% market share.

Despite the concerns, Greenberg reassured that Kraken intends to continue supporting USDT in Europe. He stressed the importance of USDT for European users and mentioned that Kraken is actively looking into ways to comply with the new regulations while still offering USDT. Greenberg affirmed that Kraken would adhere to all legal requirements, even if they find them disagreeable. He said, “We know our European customers value access to USDT, and we continue to explore all options to offer USDT under the upcoming regime. Of course, we will follow all legal requirements even if we disagree. However, the rules are not yet finalized, and we are doing everything we can to continue offering all relevant stablecoin projects to our European customers.”

Opinions from Industry Leaders

While the crypto community generally welcomes the regulatory clarity provided by MiCA, some industry leaders, like Tether CEO Paolo Ardoino, have expressed concerns. Ardoino argued that stablecoin issuers should avoid holding uninsured cash deposits and should instead keep 100% of their reserves in treasury bills to minimize the risk of bank insolvency.

Ardoino cited past incidents involving banks and stablecoin projects in the US to illustrate the dangers of uninsured cash deposits. He emphasized the need to learn from these events to ensure the stability and security of stablecoins in the future.

In conclusion, while Kraken has dispelled rumors about delisting Tether's USDT for European users, the future of stablecoins in Europe will depend on how well they adapt to the new regulatory landscape. Both Kraken and industry leaders are focused on ensuring compliance and stability as the crypto market evolves.