In a recent development, crypto exchange OKX has made the decision to delist Tether (USDT) pairs in the EU. Instead, the exchange will only support USDC and Euro-based stablecoin pairs moving forward. This move comes shortly after the EU released draft technical standards related to stablecoins, which are scheduled to be enforced starting from June. The decision to turn off USDT trading pairs in the user’s region and only offer EUR and USDC pairs for spot trading highlights the impact of regulatory requirements on the cryptocurrency market.
According to a message reportedly sent to a customer on March 18, OKX plans to counteract the delistings by adding 30 new trading pairs. The exchange attributed the changes to “regulatory requirements” that vary across different regions. Despite the lack of a public statement from OKX regarding the delisting, there are speculations that the move is connected to the stablecoin regulations outlined in the Markets in Crypto-Assets (MiCA) regulatory scheme.
The implementation of MiCA legislation in the EU, expected to be fully operational by the end of 2024, poses challenges for cryptocurrency exchanges. The regulations, set to start in June 2024, limit the issuance of stablecoins to Electronic Money Institutions (EMI) and credit institutions. This requirement aligns with the existing EU Electronic Money Directive (EMD). Companies like Circle and USDC are in a favorable position to meet these new standards since Circle applied for an EMI license in December 2023.
The removal of certain trading pairs by OKX and other exchanges may be the beginning of a trend driven by increasing regulatory scrutiny in the cryptocurrency space. The additional regulations outlined in the MiCA framework could potentially disrupt operations for exchanges and issuers not in compliance with the new standards. As the deadline for implementation approaches, market participants may face challenges in adapting to the evolving regulatory landscape.
The delisting of Tether (USDT) pairs by OKX in the EU serves as a reminder of the regulatory pressures impacting the cryptocurrency market. The shift towards supporting USDC and Euro-based stablecoins reflects the need for exchanges to navigate the changing regulatory environment. As the EU prepares to enforce stricter rules for stablecoin issuers, companies in the cryptocurrency space will need to demonstrate compliance with the new regulations to remain operational in the region.