Kraken and Crypto.com are among the exchanges that plan to launch stablecoins in EU
Kraken and Crypto.com are among crypto exchanges developing their own stablecoins in response to the EU’s new regulatory framework, which is set to tighten oversight on third-party issuers, Bloomberg News reported on Feb. 21.
Stablecoins issued in Europe will be subject to more stringent compliance measures under the Markets in Crypto-Assets regulation (MiCA), enacted in January.
Under MiCA, all stablecoins — referred to as “e-money tokens” (EMTs) and “asset-referenced tokens” (ARTs) in legal terms — must obtain authorization from an EU-based financial regulator. Issuers are also required to maintain a stable back-up with liquid assets and demonstrate transparency.
MiCA is already reshaping Europe’s stablecoin landscape. Non-compliant stablecoins, including Tether’s USDT and PayPal’s PYUSD, have been forced off most exchanges operating in Europe because they do not meet the new requirements.
The European Securities and Markets Authority has set a March 2025 final deadline for exchanges delisting all unauthorized stablecoins. This will further pressure issuers into ensuring compliance or leaving the region.
Kraken and Crypto.com’s response
Rather than rely on third-party stablecoin providers that may struggle to meet MiCA’s rules, Kraken and Crypto.com are proactively developing proprietary stablecoins to ensure regulatory compliance and maintain operational stability within the EU.
Kraken, according to reports, plans to launch an stablecoin with a US Dollar backing through its Irish subsidiaries. This will allow the company to maintain a presence in Europe without interruption.
Crypto.com also develops its own stablecoin. Details about the fiat backing of its stablecoin and its issuance are still unknown. The company recently secured a MiCA license from Malta’s financial regulator, enabling it to operate across all European Economic Area (EEA) member states.
In-house stablecoins are a direct reaction to the increasing regulatory control over digital assets in Europe. This ensures exchanges maintain control over their transactions and liquidity, rather than relying upon third-party stablecoin issues that could face legal uncertainty.
Scramble to comply
MiCA will set a precedent for the regulation of stablecoins around the world and influence policy beyond the EU. This includes the US and Asia.
The framework requires stablecoin issues to have fully-backed reserves in liquid assets of high quality, disclose the redemption mechanism clearly, and get direct authorization from EU member states.
The regulation also introduces caps on large-scale stablecoins exceeding €200 million in daily transactions, aiming to mitigate systemic risks.
Many stablecoins struggle to meet the deadlines for compliance. Circle has made steps to align USDC and MiCA. Other issuers including Tether have yet to receive regulatory approval.
While exchanges position themselves in the new framework, others are positioning their own. KuCoin has recently applied for an Austrian MiCA license, reflecting the shift in regulatory alignment among major platforms.
