Uphold, a New York-based cryptocurrency exchange, has announced that it will cease support for several stablecoins starting July 1, 2024. This move is in response to the upcoming implementation of the European Union's Markets in Crypto-Assets Regulation (MiCA), which introduces stricter rules for fiat-backed and algorithmic stablecoins.
Stablecoins Affected
The stablecoins that will no longer be supported by Uphold include:
- Tether (USDT)
- Dai (DAI)
- Frax Protocol (FRAX)
- Gemini Dollar (GUSD)
- Pax Dollar (USDP)
- TrueUSD (TUSD)
Reason for Delisting
The delisting of these stablecoins is due to the new regulations under MiCA, which require stablecoin issuers in the EU to obtain licenses as credit or Electronic Money Institutions (EMIs). Uphold has decided to end support for these stablecoins to comply with these regulations.
User Action Required
Users who hold these stablecoins on Uphold are required to convert their holdings to another cryptocurrency by June 28, 2024. If users fail to do so, their holdings will be automatically converted to USD Coin (USDC) on June 28.
Impact on the Market
The delisting of these stablecoins is likely to have a significant impact on the cryptocurrency market. The move is seen as a response to the increased regulatory scrutiny and the need for stablecoin issuers to comply with stricter rules. This may lead to a shift in the market dynamics, with some stablecoins potentially gaining more traction while others may struggle to maintain their value.
Other Exchanges' Responses
Other cryptocurrency exchanges, such as Binance and OKX, have also adjusted their stablecoin policies in response to MiCA. Binance, for instance, has categorized its stablecoins into "regulated" and "unauthorized" groups, although the specifics are still being finalized.
MiCA Regulations
MiCA, enacted in May 2023, introduces stringent requirements for stablecoin issuers, including a 1:1 reserve ratio and third-party custody of assets. The regulations aim to ensure stability and consumer confidence in the cryptocurrency market. The full implementation of MiCA is expected by the end of 2024.
Conclusion
Uphold's decision to cease support for multiple stablecoins is a significant development in the cryptocurrency market. The move is a response to the increased regulatory scrutiny and the need for stablecoin issuers to comply with stricter rules under MiCA. The impact on the market is likely to be significant, with some stablecoins potentially gaining more traction while others may struggle to maintain their value.
Top comments (1)
I was wondering when they were going to come after Uphold...