The impact of stablecoin delisting

Antony Welfare, CBDC advisor to Ripple, discusses the impact of MiCA regulations on stablecoins such as USDT, following the delisting of pro-XRP exchange Uphold.

Welfare has sparked discussion on social media about the impact of the new MiCA regulations on stablecoins such as USDT. The X post highlights how the MiCA regulation treats USD stablecoins differently, raising concerns in the stablecoin market, especially amid notable delistings and regulatory shifts.

He noted that the MiCA regulation’s treatment of stablecoins results in different treatment of USD stablecoins. He is curious about which stablecoins will meet the compliance requirements. The comment came in response to Uphold’s announcement.

Uphold and Binance review stablecoin products

Uphold announced that it will stop supporting multiple stablecoins, including USDT, FRAX, TUSD, DAI, GUSD, FRAX, and USDP, starting July 1, 2024 due to MiCA regulations. Users are advised to convert their holdings before June 27, 2024, after which remaining assets will be automatically converted to USDC.

The U.S. exchange, which supports XRP, said it will continue to support USDC, EURC, and PYUSD in the future.

Binance, the world’s largest cryptocurrency exchange, also reviewed its stablecoin products to comply with MiCA regulations earlier this month. Although the platform has not explicitly begun delisting procedures, it has restricted access to “unauthorized stablecoins” for users in the European Economic Area.

Tether’s CEO Paolo Ardoino previously expressed concern that the MiCA regulations could make operations more complicated for stablecoin issuers and potentially increase risks, suggesting these regulatory restrictions need to be adjusted.

Innovation or fraud?

In response to Welfare’s post, the crypto community questioned the timing of these moves, linking it to Tether’s recent allegations and gold-backed stablecoin launch.

Tether recently launched Alloy by Tether, an asset class backed by Tether Gold. The move aims to increase the stability of the digital economy by combining the stability of stablecoins with the reliability of gold.

One commenter questioned whether this was a smart move, while another claimed it was a sign that Tether was set to engage in further scams.

Tether is under fire

On top of that, Tether faces new challenges as a movement accuses the company of corruption and criminal activity and demands transparency and independent audits.

A digital billboard in Times Square, along with other ads, accuses Tether of illegal activity. The movement has heightened scrutiny of Tether, just as the company is launching a new product.

MiCA’s role in the future of digital assets

The MiCA regulation, which covers both utility tokens and stablecoins, is part of the EU’s efforts to establish a solid framework for digital assets.

The Bank of France’s report shows that MiCA will play a key role in the digital economy and tokenized finance. Another crypto market player, XRP, is also expected to fall under MiCA’s regulatory purview, but this has not yet been confirmed.

Disclaimer: This content is for informational purposes only and should not be considered financial advice. The opinions expressed in this article may reflect the author’s own opinions and do not necessarily reflect the opinions of The Crypto Basic. Readers are advised to perform adequate research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.