Uphold, a leading cryptocurrency exchange, has announced it will cease support for six popular stablecoins by July 1 to comply with the European Union’s Markets in Crypto-Assets Regulation (MiCA). This move is part of a broader trend among major crypto exchanges to align their practices with new regulatory requirements.

The stablecoins affected by Uphold’s decision include Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini dollar (GUSD), Pax dollar (USDP), and TrueUSD (TUSD). Users holding these stablecoins must convert them to another cryptocurrency by June 28, after which the platform will automatically convert any remaining balances into USD Coin (USDC).

MiCA, which was passed into law in May 2023 and partially implemented in June 2023, imposes stricter regulatory requirements on fiat-backed stablecoins and e-money tokens. The regulations are set to come into full effect by the end of 2024, aiming to enhance consumer confidence in digital currencies.

“MiCA places additional and stricter regulatory requirements on fiat-backed stablecoins and e-money tokens that have crossed a predetermined adoption threshold,” Uphold explained in its notice to customers. These measures include a 1:1 reserve ratio for fiat-backed stablecoins and requirements for issuers to maintain asset reserves with a third party, separate from other assets.

From June 30, MiCA’s stablecoin regulations will be active in the European Economic Area. Crypto exchanges like Uphold, Binance, Kraken, and OKX have been updating their policies to comply. Binance, for instance, categorized its stablecoins into “regulated” and “unauthorized” groups, though it has yet to finalize which fall under each category. OKX delisted Tether in Europe earlier this year without citing MiCA, while Kraken is still reviewing its stance on USDT.

These changes come as the European Banking Authority takes charge of overseeing these tokens, shifting control from national authorities within the EU. This regulatory shift aims to ensure stablecoins are reliable for use as a store of value and for payments.

In summary, Uphold’s delisting of six stablecoins by July 1 marks a significant step in the ongoing adjustments within the crypto industry to meet the stringent MiCA regulations, ensuring stability and security in the digital currency market.

SOURCE: Uphold to delist USDT and 5 stablecoins by July 1, citing MiCA