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.
This move is in response to the Markets in Crypto-Assets regulation (MiCA), that came into force in January and introduced stricter compliance requirements for stablecoin issuesrs on the European Market.
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. The issuers also have to demonstrate that they are transparent in their reserves and maintain a stable back-up with liquid assets. They must comply with strict consumer protection laws.
MiCA is already reshaping Europe’s stablecoin scene. 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, (ESMA), has established a March 20, 2025 final deadline for all exchanges to unlist any stablecoins that are not authorized. Issuers will be further pressed to comply or leave the area.
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 plans to launch an stablecoin backed by the US dollar through its Irish subsidiary. This would enable it to continue its European presence with no disruption.
Crypto.com has also developed its own stablecoin. However, details regarding its fiat backer and its issuance structure are not disclosed. 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 tighter regulatory controls on digital assets across Europe. This ensures exchanges maintain control of their transactions and liquidity, rather than depending on stablecoins issued by third parties that could face legal uncertainties.
Get scrambled to comply
MiCA will set the global standard for regulation of stablecoins and influence policy beyond the EU. This includes the US, Asia and other regions.
It requires that stablecoins issuers hold reserves fully backed by high-quality liquid assets. They must also disclose clearly the redemption mechanism and receive direct approval from an EU state.
The regulation also introduces caps on large-scale stablecoins exceeding €200 million in daily transactions, aiming to mitigate systemic risks.
These requirements have made it difficult for many stablecoins to adhere to the deadlines. Circle’s USDC has been aligned with MiCA. Other issuers including Tether have not yet finalized regulatory approvals.
Exchanges, meanwhile, are adjusting to the new regulatory framework. KuCoin has recently applied for an Austrian MiCA license, demonstrating a larger shift in regulatory alignment among the major platforms.
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