Kraken is 'actively reviewing' whether to end Tether support in the EU: report

Crypto exchange Kraken is "actively reviewing" whether to delist the stablecoin Tether ( USDT +0.030% ) in its European market, Bloomberg reports. 

The move, which the company is still considering, would end support for Tether in the exchange's European platform following approval of MiCA. Kraken's Global Head of Regulatory Strategy Marcus Hughes told Bloomberg that the exchange is "absolutely planning for all eventualities, including situations where it's just not tenable to list specific tokens such as USDT," adding that "it's something we're actively reviewing." The firm will make a final decision once the "position becomes clearer," Hughes adds. 

When The Block reached out to Kraken for comment, a company spokesperson said, "There are no current plans to delist Tether or alter our USDT trading pairs. As a leading crypto exchange, we are constantly evaluating our global strategy and operations to ensure that we remain compliant both now and in the future. We are committed to following the rules as we continue our mission of accelerating the adoption of this asset class."

Should Kraken decide to delist the stablecoin, the firm would follow OKX, which pulled Tether trading pair support in Europe in March as stablecoin regulation loomed. 

The regulation, called Markets in Crypto Assets (MiCA), issued by the European Banking Authorities, was approved in April 2023. The regulatory framework mandates that stablecoins issued in the region will have to pass increased regulatory requirements. MiCA implementation rolls out in different phases, with certain applications slated for mid-2024 and other rules aiming to go into effect by December 2024.

Tether maintains $116.76 billion worth, or 69.6%, of the total $167.78 billion worth of the USD-pegged stablecoin supply, according to The Block's Data Dashboard. 

Tether talks with regulators

Tether's CEO Paolo Ardoino wrote in April that the firm is "still discussing with the regulator about our concerns," adding that the proposed rules would "pose severe risks to stablecoins regulated in the EU." 

"Uninsured cash deposits are not a good idea," Ardoino continued. "We should learn from what happened with Silicon Valley Bank and another major stablecoin in the US. If a bank goes bankrupt, uninsured cash goes into bankruptcy. Stablecoins should be able to keep 100% of reserves in treasury bills, rather than exposing themselves to bank failures keeping big chunk of reserves in uninsured cash deposits. In case of bank failure, securities return back to the legitimate owner. We hope to continue the dialogue with EU regulators to address those concerns."

Update (May 17 19:30 UTC ): Added comment from a Kraken spokesperson.