Popular New York-based crypto exchange Uphold has announced that it will delist six stablecoins in response to the upcoming European Union MiCA regulation, including the largest, Tether (USDT). 📉

This decision is in line with the CryptoAssets Market (MiCA) regulation, which will come into full force on June 30, 2024. This raises concerns about the future of USDT in the region. 🤔

According to Elixir COO Tim Wang, short-term effects could lead to displacement in liquidity and trading markets due to the dominance of USDC and USDT on centralized exchanges.

New EU crypto laws impose strict regulations on fiat-backed stablecoins and e-money tokens that exceed a certain acceptance threshold. MiCA's main provisions include a 1:1 backing of fiat-based stablecoins with liquid reserves, separation of ownership of reserve assets, and a ban on algorithmic stablecoins.

Uphold isn't the only firm buckling under the pressure. To avoid regulatory issues and ensure compliance, many major crypto exchanges such as Kraken, Binance, and OKX have made certain changes to their stablecoin listing policies.

The upcoming MiCA regulations could set a precedent that impacts crypto regulations in other regions where provisions for stablecoins in the EU may not carry the same importance. Wang thinks “stablecoin hegemony” will become an increasingly controversial political issue.