Kraken is considering discontinuing support for Tether's USDT stablecoin in the European Union, as reported by Bloomberg on May 17. Marcus Hughes, Kraken's Global Head of Regulatory Strategy, mentioned preparations for scenarios where listing specific tokens like USDT might become impractical.

The potential change comes ahead of the EU's upcoming Markets in Crypto-Assets (MiCA) guidelines, effective from July. MiCA mandates that issuers of fiat-backed stablecoins, such as Tether, register as electronic money institutions (EMIs) and meet regulatory standards.

Hughes indicated that these new regulations could lead to fewer stablecoin options in Europe, depending on which companies comply with the EU's framework.

However, a Kraken spokesperson clarified to The Block that the exchange continually evaluates its compliance strategy globally and currently has no immediate plans to delist Tether or modify its USDT trading pairs.

Regarding regulatory concerns in the EU, Tether expressed expectations for exchanges to maintain USDT as a bridge for transactions while providing EUR liquidity for European customers. Tether's Chief Technology Officer, Paolo Ardoino, criticized MiCA for its stringent requirements on reserve management and stated that Tether currently has no intentions to seek regulatory approval in the EU.

In anticipation of MiCA, other cryptocurrency exchanges have also adjusted their operations. For instance, OKX discontinued Tether support for EU users in March without explicitly citing regulatory changes, opting to continue supporting Circle's USDC stablecoin instead.

Binance France's legal head, Marina Parthuisot, previously hinted in September 2023 about the potential delisting of all stablecoins in Europe by June 30. Binance's CEO, Changpeng Zhao, later clarified that these statements were misconstrued and affirmed the exchange's partnerships with compliant stablecoin issuers.