Cryptocurrency exchange Uphold has informed its European users that it will cease support for six popular stablecoins starting July 1. This move is part of an effort to comply with the European Union’s Markets in Crypto-Assets Regulation (MiCA).
The stablecoins affected by this decision are Tether (USDT), Dai (DAI), Frax Protocol (FRAX), Gemini Dollar (GUSD), Pax Dollar (USDP), and TrueUSD (TUSD). Users holding these stablecoins are required to convert them to a different cryptocurrency by June 28, after which Uphold will automatically convert any remaining balances into USD Coin (USDC).
The MiCA legislation, which became law in May 2023 and partially came into effect in June 2023, will be fully enforced by the end of 2024. Starting June 30, MiCA’s regulations on stablecoins will be implemented within the European Economic Area. These regulations impose stricter requirements on fiat-backed stablecoins and e-money tokens that exceed certain adoption thresholds, as determined by seven quantitative and qualitative indicators. The European Banking Authority will oversee these tokens instead of national authorities of EU member states.
Under MiCA, fiat-backed stablecoins must maintain a 1:1 ratio of liquid reserves and issuers are required to hold these reserves in custody with a third party, separate from other assets. Algorithmic stablecoins are explicitly banned. These measures are designed to bolster consumer confidence in digital currencies by ensuring that stablecoins are reliable as stores of value and for payments. As a result, stablecoin issuers in the EU must obtain licenses as credit institutions or Electronic Money Institutions under the MiCA framework. While the future of some stablecoins is uncertain, those backed by the euro may benefit from the new regulations.
In response to MiCA, other major crypto exchanges, including Binance, Kraken, and OKX, have also adjusted their stablecoin listing policies. Binance has categorized its stablecoins into “regulated” and “unauthorized” but has yet to finalize which stablecoins fall into each category. In March, OKX delisted Tether in Europe without referencing MiCA, while Kraken is still evaluating whether to continue supporting USDT in the region.
