With new European Union regulations requiring stablecoin issuers to be authorized by 2025, major crypto platforms Kraken and Crypto.com are developing their own stablecoins to ensure compliance and maintain seamless operations.
Adapting to the EU’s MiCA Regulations
The European Union’s Markets in Crypto-Assets (MiCA) regulation, set to take effect in January 2025, mandates that all stablecoin issuers obtain proper authorization to operate within the EU. The regulation aims to enhance transparency, improve liquidity, and provide stronger consumer protections within the crypto market.
To align with these new requirements, crypto service providers such as Kraken and Crypto.com are preparing to launch their own stablecoins, as reported by Bloomberg. This move allows them to avoid reliance on third-party stablecoin issuers that may struggle to meet the EU’s regulatory requirements, ensuring their platforms remain fully functional within the region.
The Role of Stablecoins in Crypto Trading
Stablecoins are digital assets designed to maintain a steady value, typically backed by fiat currencies such as the U.S. dollar or euro. They serve as a crucial bridge between cryptocurrencies and traditional finance, providing traders with a reliable means of converting digital assets into fiat currency without exposure to extreme price volatility.
Currently, many crypto exchanges rely on stablecoins such as Tether (USDT) and USD Coin (USDC), issued by third-party companies Tether and Circle, respectively. However, the introduction of MiCA has encouraged exchanges to develop proprietary solutions to ensure long-term compliance and operational security.
Kraken and Crypto.com’s Stablecoin Plans
Kraken is working on a dollar-backed stablecoin, which will be issued through its Irish subsidiary. Meanwhile, Crypto.com is planning to launch its own stablecoin in the third quarter of 2025, though specific details regarding its fiat backing and issuance model remain undisclosed.
By developing in-house stablecoins, both companies aim to mitigate regulatory risks and ensure they can continue offering stablecoin transactions under the EU’s evolving regulatory framework. This strategic move positions them to remain competitive and compliant in the rapidly changing digital asset landscape.
