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Antony Welfare, CBDC Advisor at Ripple, discusses MiCA regulations’ impact on stablecoins like USDT, following delistings by pro-XRP exchange Uphold.
Welfare sparked discussion on social media regarding the implications of the new MiCA regulations on stablecoins like USDT. The X post, highlighting how MiCA regulations treat USD stablecoins differently, has drawn attention amidst notable delistings and regulatory shifts in the stablecoin market.
https://twitter.com/AntonyWelfare/status/1802790828991021286
He pointed out that the MiCA regulations for stablecoins result in varying treatment for USD stablecoins. He was curious about which stablecoins would meet the compliance requirements. This comment followed an announcement from Uphold.
Uphold and Binance Review Stablecoin Offerings
Uphold announced that, as of July 1, 2024, it will stop supporting several stablecoins, including USDT, FRAX, TUSD, DAI, GUSD, FRAX, and USDP due to MiCA regulations. Users are advised to convert their holdings by June 27, 2024; any remaining assets after this date will be automatically converted to USDC.
The pro-XRP American-based exchange noted it will continue supporting USDC, EURC, and PYUSD going forward.
Binance, the world’s largest crypto exchange, also reviewed its stablecoin offerings earlier this month to conform with MiCA regulations. Although the platform did not particularly begin a delisting process, it restricted access to “unauthorized stablecoins” for EEA users.
Paolo Ardoino, Tether’s CEO, previously expressed concerns that MiCA regulations could make stablecoin issuers’ operations more complex and potentially increase risks, suggesting the need for adjustments to these regulatory constraints.
Innovation or Fraud?
Reacting to Welfare’s post, the crypto community questioned the timing of these moves, linking them to Tether’s recent allegations and the release of a gold-backed stablecoin.
Tether recently launched Alloy by Tether, an asset class backed by Tether Gold. This move aims to enhance stability in the digital economy by combining the consistency of a stable currency with the dependability of gold.
One commenter questioned if this was a smart play, while another alleged it was indicative of further fraudulent activities by Tether.
Tether Under Fire
Adding to the complexity, Tether faces new challenges as a campaign has emerged accusing the company of corruption and criminal activities, calling for transparency and independent audits.
A digital billboard in Times Square, along with other advertisements, accuses Tether of illicit activities. This campaign has heightened scrutiny on Tether just as it introduces new products to the market.
MiCA’s Role in the Future of Digital Assets
The MiCA regulation, which covers utility tokens and stablecoins, is part of the European Union’s effort to create a robust digital asset framework.
Reports from the Banque de France indicate that MiCA will play a crucial role in digitizing the economy and tokenizing finance. XRP, another player in the crypto market, is also expected to fall under MiCA’s purview, but this remains unconfirmed.