Outside Source
With new EU regulations requiring stablecoin issuers to be authorized starting in 2025, major crypto platforms like Kraken and Crypto.com are developing their own stablecoins to stay compliant and ensure smooth operations.
The European Union’s Markets in Crypto-Assets regulation, effective from Jan. 2025, mandates that all stablecoin issuers obtain proper authorization to operate within the EU. This regulation aims to enhance transparency, liquidity, and consumer protection in the crypto market. This shift has led crypto service providers like Kraken and Crypto.com to launch their own stablecoins coins to maintain seamless services, as reported by Bloomberg.
Stablecoins are digital assets intended to maintain a steady value, typically backed by traditional currencies like the U.S. dollar or euro. Stablecoins are commonly used to convert cryptocurrencies into fiat money, as they remain stable and are not subject to the extreme price swings seen in other digital assets.
Normally, crypto exchanges rely on stablecoins like Tether (USDT) and USD Coin (USDC), issued by third-party companies—Tether and Circle, respectively.
However, the new European regulations are encouraging them to develop proprietary solutions in order to avoid potential dependency on third-party stablecoin issuers that may not comply with the EU’s new regulations. If they don’t issue their own stablecoins, they may face challenges if the third-party stablecoin issuers aren’t authorized or compliant with MiCA.
Kraken is currently working on a dollar-backed stablecoin, which will be issued through its subsidiary in Ireland. Crypto.com is also planning to launch its own stablecoin in the third quarter of 2025, but the details about the fiat currency it will be backed by and other specifics are still unclear.
This article first appeared at crypto.news
