Kraken, a prominent cryptocurrency exchange, is "actively reviewing" whether to discontinue support for the stablecoin Tether (USDT) in its European market, according to a report by Bloomberg. This potential move comes in response to the recent approval of the Markets in Crypto Assets (MiCA) regulation by the European Banking Authorities.

Marcus Hughes, Kraken's Global Head of Regulatory Strategy, told Bloomberg that the exchange is planning for various scenarios, including the possibility of delisting specific tokens like USDT. "We are absolutely planning for all eventualities, including situations where it's just not tenable to list specific tokens such as USDT," Hughes said, adding that the company is actively reviewing the situation and will make a final decision once the regulatory position becomes clearer.

Despite these considerations, Kraken assured The Block that there are currently no plans to delist Tether or alter USDT trading pairs. A company spokesperson stated, "As a leading crypto exchange, we are constantly evaluating our global strategy and operations to ensure that we remain compliant both now and in the future. We are committed to following the rules as we continue our mission of accelerating the adoption of this asset class."

If Kraken decides to delist Tether in Europe, it would follow the example of OKX, which removed Tether trading pair support in March in anticipation of stricter stablecoin regulations. MiCA, approved in April 2023, sets out enhanced regulatory requirements for stablecoins issued within the EU. The framework will be implemented in phases, with some rules taking effect by mid-2024 and others by December 2024.

Tether currently holds a significant market share, with $116.76 billion worth, or 69.6%, of the total $167.78 billion USD-pegged stablecoin supply, according to The Block's Data Dashboard.

Paolo Ardoino, Tether's CEO, expressed concerns about the new regulations in April, stating that the proposed rules could pose significant risks to stablecoins regulated in the EU. "Uninsured cash deposits are not a good idea," Ardoino warned, referencing the collapse of Silicon Valley Bank and its impact on another major stablecoin in the US.

He emphasized the importance of keeping reserves in treasury bills rather than uninsured cash deposits to mitigate risks associated with bank failures. "We hope to continue the dialogue with EU regulators to address those concerns," Ardoino added.

As Kraken continues to assess its position, the outcome will significantly impact the European crypto market and the future of Tether within the region.