Kraken, a leading cryptocurrency exchange, is considering delisting Tether’s stablecoin (USDT) from its European Union (EU) market due to Tether's decision not to comply with the upcoming MiCA regulations, set to be implemented in July. These new regulations could challenge the legitimacy of stablecoins like USDT, as many currently lack authorization and regulation in Europe. Kraken is proactively reviewing Tether’s legal status and preparing for various outcomes to ensure compliance with the new rules.

Marcus Hughes, Kraken’s global head of regulatory strategy, emphasized that Kraken is preparing for all possibilities, including the potential delisting of USDT. While Tether has stated it has no plans to delist USDT or alter its trading pairs, it continues to evaluate its global strategies to ensure compliance.

Tether’s CEO, Paolo Ardoino, confirmed the company’s reluctance to comply with MiCA regulations, citing potential risks and impacts. Ardoino expressed concerns over MiCA’s requirement for stablecoin issuers to become Electronic Money Institutions (EMIs) or partner with one, which could impose significant risks. Until MiCA is amended or Tether complies, USDT’s status in the EU is expected to become illegal, prompting exchanges to prepare for its delisting.

OKX has already removed support for USDT in the EU, and Circle, another stablecoin issuer, is relocating its operations from the EU to the US. Tether’s stance could significantly impact exchanges and the market, potentially leading to a shift in liquidity and trading patterns within the crypto market as users seek compliant alternatives.