Learn Concept: The Impact of Stablecoin Regulations on Crypto Exchanges

By: Isha Das

With the rise of cryptocurrencies, many countries and regions worldwide are planning to implement stringent regulatory measures. One such region is the European Union (EU), which is setting up draft technical standards related to stablecoins that will likely come into effect from June 2024. In response, cryptocurrency exchanges have started making strategic maneuvers. For instance, OKX, a prominent cryptocurrency exchange, has recently decided to delist Tether (USDT) pairs and only support USDC and Euro-based stablecoin pairs.

The proposed guidelines in the upcoming Markets in Crypto-Assets (MiCA) regulatory scheme underline that only Electronic Money Institutions (EMIs) and credit institutions will be allowed to issue stablecoins. As a result, only those exchanges that are well-prepared for this change will be able to smoothly transition. One such exchange could be Circle, the issuer of USDC, as they have already applied for an EMI license back in December 2023 to comply with the expected MiCA requirements.

The proposed regulations and their impact on crypto exchanges illustrate the dynamic and ever-evolving nature of the crypto world. It is key for advanced crypto users to understand and stay updated with such regulatory changes for effective navigation and strategizing in the cryptosphere.