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February 1, 2025 by Mwongera Taitumu
- Kraken restricts margin trading for USDT and stablecoins in EEA.
- MiCA regulations prompt delisting of USDT and other stablecoins.
- USDC’s market share rises as USDT faces regulatory challenges.
Kraken has announced that it will delist Tether (USDT) and other stablecoins in Europe by March 2025. The decision comes as European regulators ramp up efforts to enforce the Markets in Crypto-Assets (MiCA) regulations, reshaping the market landscape.
Kraken to Delist USDT and Stablecoins in EEA
Kraken, a prominent cryptocurrency exchange, has announced plans to delist Tether (USDT) and several other stablecoins across the European Economic Area (EEA). This move comes ahead of the implementation of the European Union’s Markets in Crypto-Assets Regulations (MiCA). The delisting will be carried out in stages before the March 31, 2025 deadline.
The process will begin on February 13, 2025, when Kraken will restrict margin trading for these stablecoins to “reduce-only” mode for EEA users. This means users will no longer be able to open new positions using USDT, PayPal USD (PYUSD), Euro Tether (EURT), TrueUSD (TUSD), and TerraUSD (UST). On February 27, 2025,spot trading will shift to “sell-only” mode and prevent new transactions involving these assets.
Kraken will close all open margin positions involving the listed stablecoins by March 17, 2025. Spot trading will stop completely by March 24, with all pending orders canceled. Any remaining holdings of these stablecoins will be converted to a compliant asset by March 31, 2025. Users are encouraged to convert their assets before this deadline to avoid automatic conversions.
MiCA Regulations Drive Crypto Changes in EEA
This decision comes amid increasing regulatory pressure in Europe as authorities implement MiCA rules. Kraken operates in several countries, including Germany, Spain, Italy, and France, and seeks to adjust its offerings to comply with the new regulations. Moreover, there is a growing trend of exchanges making adjustments to comply with regional legal standards.
Other major exchanges such as Coinbase and Crypto.com have also announced the delisting of USDT in Europe. These changes reflect broader concerns about stablecoin regulations in the European market. However, Tether (USDT) continues to hold a dominant position in the global crypto market, with recent reports showing it earned a record $13 billion in profits in 2024.
Crypto.com has also announced its plans to delist USDT and USDC in compliance with the new rules. The platform will phase out these stablecoins by the end of Q1 2025, although users are still able to withdraw these assets until that time.
Stablecoin market Drift
The stablecoin market has seen significant growth, reaching a record $224 billion in total value. USDC has been gaining traction, surpassing other stablecoins in market share. USDC’s market cap rose by 120% from November 2023 to January 2024, highlighting its growth potential. However, both USDT and USDC face regulatory scrutiny in Europe as the MiCA regulations roll out.
As Europe enforces stricter rules for digital assets, more exchanges may adjust their offerings. The MiCA regulations are poised to reshape the cryptocurrency landscape in Europe, and companies are proactively ensuring compliance. The impact of these changes will become clearer as the implementation of MiCA unfolds.
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