OKX, the world's fourth-largest bitcoin (BTC) and cryptocurrency exchange by trading volume, will gradually phase out support for trading with Tether (USDT) trading pairs in European Union (EU) countries.
According to The Block, the decision was announced through an email sent to European merchants, which states that the rule came into force on March 14.
The measure was taken within the framework of the upcoming entry into force in the EU of the Regulation for the Cryptoasset Market (better known as the MiCA Law). In that sense, although OKX's message does not explicitly state that its decision is related to this Regulation, it tells users that "not all tokens will be available in all markets due to regulatory requirements."
In this way, reference is made to the new rules established by MiCA for the performance of stablecoins in the eurozone and that will begin to apply in July 2024.
The rules require issuers of stablecoins to comply with the necessary requirements to obtain a license from a national financial regulator , in at least one of the EU Member States.
As set out by MiCA , these companies will begin to be regulated as electronic money institutions (EMIs). Consequently, only this authorization will give operators credentials to serve stablecoin users across the region's entire bloc of 27 countries. The fact affects not only the operation in Europe of USDT but of other stablecoins such as USDC and DAI .
Additionally, they must comply with EU regulatory and capital standards, have a registered office in the area and a 1:1 liquid reserve that allows for the smooth redemption of assets at any time.
They will also need to define clear governance and risk management rules, as well as customer protection measures, and compliance with anti-money laundering and terrorism prevention requirements.
This is why stablecoin-related companies, including exchanges, have been preparing in advance to comply with MiCA. There are expected to be restrictions on the use of certain stablecoins in the region in the coming months.
The above explains the measures taken by OKX, which are also being implemented by other cryptocurrency exchanges.
Among them is Binance, which announced last year its plan to remove all stablecoins from its platform in Europe by June 30, 2024.
Last October, the European Securities and Markets Authority (ESMA), the European Union's banking watchdog, presented the first comprehensive set of rules applicable to cryptocurrency and stablecoin markets. For its part, the European Banking Authority (EBA) has already proposed minimum capital and liquidity requirements for issuers of stablecoins and other types of tokens.
«All projects operating in the region have to present their documents to be evaluated, Manuel Campa, president of EBA, recalled at the end of 2023 , insisting that in the process of implementing MiCA, the countries of the European Union could veto stablecoins . The banker reiterated that stablecoin issuers must "ask for permission" for their products to circulate in the EU.
