Uphold, a crypto exchange and Ripple's On-Demand Liquidity (ODL) partner, has announced plans to remove support for several USD stablecoins, including Tether (USDT), Dai (DAI), and Frax Protocol (FRAX). This move is in anticipation of the forthcoming Markets in Crypto Assets (MiCA) regulations set to take effect in the European Economic Area (EEA).

Uphold's Decision to Delist Stablecoins

Antony Welfare, CBDC Strategic Advisor at Ripple, shared Uphold's notice about the delisting. Additional stablecoins affected by this decision include Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD). Effective July 1, 2024, these digital assets will no longer be accessible on the Uphold platform.

Customers holding these stablecoins are advised to convert their assets by June 27, 2024. If not converted by this date, the stablecoins will automatically be changed into USD Coin (USDC) on June 28, 2024. This proactive measure by Uphold aligns with the MiCA regulation.

The upcoming regulation marks a significant shift in the regulatory landscape for stablecoins within the EEA, taking effect on June 30, 2024. Moreover, Uphold's decision mirrors similar actions taken by other major exchanges like Binance, OKX, and Kraken. These crypto exchanges are currently adjusting their operations to comply with MiCA requirements.

Reforms by Other Exchanges

Binance has implemented a sell-only policy for unauthorized stablecoins. In addition, the exchange has imposed additional restrictions across its services to meet the new regulatory standards. Earlier this year, OKX ceased support for USDT trading pairs within the European Union but continues to offer trading for other stablecoins such as USDC and pairs based on the euro.

Kraken is in the process of reviewing Tether's compliance under the new EU regulations. The exchange has not yet decided on the future listing of USDT, as it is still assessing the potential implications of MiCA. The MiCA framework mandates that stablecoin issuers operating in the EU must obtain licenses as Electronic Money Institutions (EMIs) or as credit institutions.

This requirement has introduced a degree of uncertainty for several stablecoins currently in use. However, stablecoins backed by the euro are anticipated to benefit and thrive under the new regulatory environment. MiCA's stablecoin regulations are poised to enhance the legal and operational transparency of the cryptocurrency market in the EEA.