Antony Welfare, CBDC Advisor at Ripple, has brought attention to the impact of MiCA regulations on stablecoins such as USDT, especially after Uphold, a pro-XRP exchange, announced delistings. Welfare’s post on social media has sparked a discussion about how the new MiCA regulations treat USD stablecoins differently, drawing attention in the midst of notable delistings and regulatory shifts in the stablecoin market.
He pointed out that the MiCA regulations result in varying treatment for USD stablecoins and raised questions about which stablecoins would meet the compliance requirements. This comment came in response to Uphold’s announcement that it will stop supporting several stablecoins, including USDT, FRAX, TUSD, DAI, GUSD, FRAX, and USDP due to MiCA regulations, with users advised to convert their holdings by a certain date.
Binance, the world’s largest crypto exchange, also reviewed its stablecoin offerings earlier this month to conform with MiCA regulations, restricting access to “unauthorized stablecoins” for EEA users. Paolo Ardoino, Tether’s CEO, expressed concerns that MiCA regulations could make stablecoin issuers’ operations more complex and potentially increase risks, suggesting the need for adjustments to these regulatory constraints.
Welfare’s post has prompted the crypto community to question the timing of these moves, linking them to Tether’s recent allegations and the release of a gold-backed stablecoin. Tether recently introduced Alloy by Tether, an asset class backed by Tether Gold, aiming to enhance stability in the digital economy. However, some community members have alleged further fraudulent activities by Tether.
In addition to these challenges, Tether is facing a campaign accusing the company of corruption and criminal activities, calling for transparency and independent audits. A digital billboard in Times Square, along with other advertisements, has accused Tether of illicit activities, intensifying scrutiny on Tether as it introduces new products to the market.
The MiCA regulation, which covers utility tokens and stablecoins, is part of the European Union’s effort to create a robust digital asset framework. Reports from the Banque de France indicate that MiCA will play a crucial role in digitizing the economy and tokenizing finance. XRP, another player in the crypto market, is also expected to fall under MiCA’s purview, but this remains unconfirmed.