The world is changing, at least in the European Union. As a result, new rules are coming in Europe regarding crypto, expected to be implemented in 2025, known as Markets in Crypto Assets (MiCA). Several measures are being taken by exchanges that want to comply with European law. In this article, we take a look at what these changes are and how we can pivot.
What Are the Impending MiCA Regulations?
The European Union’s MiCA legislation is expected to be fully operational by the end of 2024 or beginning of 2025. Under these new rules, only Electronic Money Institutions (EMIs) and credit institutions can issue stablecoins, meaning stablecoins that we all use and love can be, and probably will be, removed from circulation.
Removal of Non-Compliant Stablecoins of Exchanges
Crypto exchanges have indicated that several stablecoins might not comply with the new regulations and thus will face restrictions. However, which stablecoins would be affected has not yet been specified.
But USD Tether, one of the biggest but most controversial stablecoins, stands in the spotlight. Major crypto exchanges like Kraken and OKX are working to comply to keep offering their services to European clients and could start removing Tether’s USDT stablecoin from their platforms.
To short USDT, you can use a crypto exchange that offers margin trading or futures contracts. More info can be found here.
It is not yet clear which stablecoins will be considered ‘unregulated’ by exchanges. What could happen with the removal is the disappearance of a lot of pairings and liquidity.
What is Binance’s plan for stablecoins in the EU?
Binance will limit the availability of “unregulated stablecoins” in the EU by June 30, aligning with the upcoming Markets in Crypto-Assets Regulation (MiCA), according to a statement released on June 3.
How will Bitvavo implement the new stablecoin regulations?
Bitvavo has not yet offered information about their reaction to the new stablecoin regulations in Europe. The Dutch exchange not only offers USDT but also the more regulated stablecoin USDC.
Good for Regulated Circle – USDC
In contrast to other stablecoin issuers, Circle and its USDC stablecoin are well-positioned to meet the requirements imposed by European lawmakers. Circle applied for an EMI license in December 2023 after securing conditional registration in France, which is good news for everyone who wants to stay in crypto stablecoins.
If you want to convert your USDT to USDC, a more regulated and potentially MiCA-compliant stablecoin, you can do so on most major crypto exchanges by selling your USDT for USDC or using a direct stablecoin conversion feature if available. This can be done on Bitvavo.
Conclusion
Traditionally, Europe has lagged behind the US and Asian countries in terms of crypto regulation. But now, we see that Europe has set new entry barriers for stablecoins, which could impact the overall crypto markets, such as limiting trading pairs, withdrawal options, bonuses, and so on. We will see what is going to happen with these new regulations.
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