Crypto : Kraken Removes USDT And Aims For An In-house Stablecoin

The crypto platform Kraken is preparing to withdraw USDT from Tether in Europe due to new rules imposed by the MiCA law. Faced with this constraint, the exchange is considering launching its own stablecoin pegged to the US dollar. A strategic move that could reshape the stablecoin market and challenge Tether’s hegemony!

Kraken forced to withdraw USDT under the pressure of the crypto law MiCA

The regulatory framework MiCA is gradually coming into effect in the European Economic Area (EEA). It imposes strict rules on stablecoins. Its objective? To enhance transparency and limit the influence of non-compliant issuers. In this context, the crypto company Kraken must cease the use of USDT, which remains the most traded stablecoin on its platform.

According to CoinGecko, the pairs USDT/USD and USDT/EUR indeed represent more than 30% of the trading volumes of the crypto exchange. Despite this, Kraken announced a gradual withdrawal:

• February 13, 2025: transition of margin pairs to a “reduction only” mode
• February 27, 2025: switching to “sale only” mode for USDt
• March 24, 2025: total cessation of transactions and removal of trading pairs

According to the crypto company, this decision aims to:

• ensure compliance with MiCA,
• provide cryptocurrency investors with a transition.

However, some European crypto traders reported that USDt is still available on the platform. This has led to some confusion!

Kraken responds with its own USD stablecoin

Faced with this regulatory constraint, Kraken is not just accepting it. Indeed, the crypto platform plans to launch its own US dollar-pegged stablecoin. According to Bloomberg, this initiative could be carried out through its Irish subsidiary. In this country, the regulation of crypto assets is intended to be more flexible.

The launch of a proprietary stablecoin would allow Kraken to:

• maintain control over liquidity flows,
• free itself from the restrictive rules imposed on third-party stablecoins like USDt.

This strategy resembles that of Crypto.com, which also plans to release a MiCA-compliant stablecoin for the third quarter of 2025.

If Kraken realizes this project, it will join major players in the crypto industry. We notably refer to Binance and Circle, which already have their own stablecoins (BUSD and USDC).

The goal is clear: reduce reliance on Tether, which currently dominates the cryptocurrency market with a market capitalization of $142 billion.

What impact for crypto investors in Europe?

The disappearance of USDt in Europe could change the strategies of crypto traders and investors. Indeed, this digital asset plays a key role in DeFi. It also serves as a reference for many transactions.

Its withdrawal could therefore lead to:

• a temporary decrease in liquidity on Kraken,
• an increase in the volatility of other stablecoins,
• a migration of users to alternatives like USDC or new stablecoins.

Some cryptocurrency experts believe that this evolution could strengthen the adoption of regulated stablecoins. One thing is certain: the race for stablecoins is just beginning!

The withdrawal of USDt in Europe marks a turning point for the cryptocurrency market. Kraken and other players are betting on regulated stablecoins to adapt. It remains to be seen whether these alternatives will appeal to crypto traders or if Tether will find a way to bounce back!