Kraken, the crypto exchange based in San Francisco, is said to be considering withdrawing its support for the stablecoin USDT in the European Union (EU). According to Bloomberg, Kraken is actively reviewing its European support for the Tether-issued stablecoin.

Various European digital asset trade associations and think tanks have cautioned that the EU’s upcoming Markets in Crypto-Assets Regulation (MiCA) could potentially ban the largest stablecoins based on trading volume. MiCA is a legislation that will establish rules for the supervision, consumer protection, and environmental safeguards of crypto assets. The law also includes measures aimed at combating financial crimes such as market manipulation, money laundering, and terrorist financing. It is expected to come into effect in December 2024.

USDT, which aims to maintain a 1:1 peg to the US dollar, is currently the largest stablecoin by market capitalization. Marcus Hughes, Kraken’s global head of regulatory strategy, told Bloomberg that their stablecoin offerings are continuously evolving. He stated, “We are fully prepared for all possible scenarios, including situations where it may not be feasible to list specific tokens like USDT. We are actively reviewing this, and once the situation becomes clearer, we can make definitive decisions.”

Hughes also acknowledged that the number of stablecoins offered by Kraken in Europe may be reduced in the future.

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