NEWS IN BREIEF......

One of the biggest cryptocurrency exchanges in the world, OKX, just delisted every trading pair for USDT in order to comply with the upcoming Markets in Crypto-Assets Regulation (MiCA). Since MiCA is slated to go into force in June, there has been a great deal of conjecture surrounding the reactions of other major exchanges.

MiCA introduces licencing for issuers of electronic money tokens (EMTs), asset-referenced tokens (ARTs), and crypto-asset service providers (CASPs). It also lays out specific regulatory requirements that apply to these entities, including rules pertaining to consumer protection for the issuance, trading, exchange, and custody of crypto-assets.

MiCA also lays out a framework for market abuse that forbids insider trading and market manipulation and makes clear the authority, collaboration, and punishment framework that are available to appropriate authorities. The regulation states that only legitimate entities with established offices within the European Union are permitted to offer crypto-asset services. Because of their potential impact on consumer protection and financial stability, substantial ARTs, EMTs, and crypto-asset service providers are subject to increased regulatory requirements and scrutiny.

In an effort to simplify this intricate story, crypto.news contacted Natalia Latka, a policy director at blockchain analytics company Merkle Science and a pioneer in the fields of financial crime and cryptocurrency compliance.

Natalia Latka: OKX's move might signal more significant developments to come in Europe. Stablecoins that violate MiCA may be restricted or removed from the list by exchanges in order to be in compliance with the new legal framework or to avoid regulatory scrutiny. This change may cause non-compliant tokens to become less common or encourage their issuers to become compliant.

MiCA is a regional law, but it may have worldwide ramifications. Global norms for stablecoin regulation may be influenced by non-EU stablecoin issuers that modify their business practices to gain access to the European market. However, the strict criteria of MiCAR can potentially have a negative effect on stablecoin issuers' operations and willingness to service the EU market.

The market's response to MiCA's introduction may result in a rise in the use of substitute stablecoins. It's possible that EMTs based on the euro will become more well-liked. It is unrealistic to believe, meanwhile, that stablecoins based on the euro would overtake their USD-pegged counterparts in trading pairs anytime soon, or even close to achieving their trading volumes.

Such a big change is unlikely to occur anytime soon due to the current state of the market and the established dominance of stablecoins that reference the US dollar.