Bitstamp, the European headquartered crypto exchange, has reversed its decision to support Tether Euro-backed stablecoin EURT. The decision to end supporting EURT and other stablecoin came days ahead of the market in crypto assets (MiCA) regulation.
Bitstamp ranks among the best-performing centralized crypto exchanges that have been in operation for a long time. To solidify its market position in the European market, Bitstamp seeks to comply with the MiCA rule.
MiCA Rules Take Effect
Under the new rules, stablecoin not pegged to the Euro will be considered non-compliant with the MiCA regulations as of June 30. Correspondingly, virtual asset service providers (VASPs) must delist some crypto assets to comply with the new legislation.
This implies that VASP operating in Europe will be restricted from supporting or promoting some of the digital assets. Having been the first crypto exchange to offer EURT to European users, Bitstamp has reversed its course on the stablecoin offering.
In an attempt to boost financial inclusivity in the European Union, the world’s largest stablecoin issuer by market cap, Tether launched the EURT in 2021. CoinGecko report shows that EURT market cap reached $33 million in the last 24 hours.
In February, the EURT market cap breached the $236 million resistance level, attaining its all-time high. Since then, the EURT established a dribbling momentum, dropping below $35 million.
An announcement conveyed by James Sullivan, the managing director of Bitstamp UK, stated that the crypto exchange was engaging in dialogue with the customers affected by the changes.
The executive confirmed that some Bitstamp customers had invested in EURT. Having gained popularity as a compliant crypto exchange in the United Kingdom, Sullivan vowed to remain steadfast in upholding the law.
He admitted that Bitstamp has advocated for compliance to protect consumers from manipulative practices.
Bitstamp to Delist Stablecoins Not Conforming with MiCA Requirements
In an earlier interview with the DL News, Bitstamp hinted at delisting stablecoins not conforming to the MiCA rules. A review of MiCA rules demonstrates that starting next month, stablecoin issuers must implement adequate security measures to protect consumers from unlawful business practices.
In response to Bitstamp’s delisting of EURT, the chief executive of Tether, Paul Ardoino, claimed that the MiCA rules were more complex. The executive stated that Tether was still considering the MiCA provision. Ardoino confessed that Tether was not ready to be regulated under the MiCA rule.
The enactment of the MiCA rule will subject crypto exchanges in the US to stringent regulations to offer stablecoins. The crypto exchange offering stablecoin or any form of e-money coins must have adequate liquid reserve backing the stablecoin.
The recent Bitstamp move mirrors Binance’s changes to sustain its operation ahead of the MiCA rule. In March, the Binance team confirmed it would restrict stablecoin issuance, which did not conform to the MiCA rules.
The Binance team grouped the stablecoins supported by the crypto exchange under-regulated and unauthorized categories. The sub-division of the stablecoins aimed to enable the Binance team to identify the fiat-backed stablecoin that did not comply with the MiCA provision.
The Binance is expected to disclose which stablecoins were grouped as regulated or unauthorized.
MiCA Rules Forces Exchange to End Support Some Stablecoins
Elsewhere, the Coinbase team confirmed plans to assess stablecoins conforming to the MiCA rule. The Coinbase stated that once the MiCA takes effect, the crypto exchange will support some stablecoins.
Similarly, the Uphold exchange revealed plans to cease supporting USDT and the other six stablecoins to conform with MiCA rules. The Uphold team advised the investors holding USDT, TrueUSD, Pax Dolla, DAI, and Gemini dollar to convert these assets to other crypto before MiCA takes effect.
Other exchanges replicating the Uphold move include the OKX team. In late March, the OKX delisted Tether for its European users. Also, Kraken had hinted to end supporting USDT.
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