Kraken and Crypto.com Set to Launch Proprietary Stablecoins in 2025

Kraken and Crypto.com are both preparing to launch their proprietary stablecoins in response to the new regulatory framework set by the European Union. Starting in January 2025, the EU’s Markets in Crypto-Assets (MiCA) regulation will require all stablecoin issuers to obtain proper authorization to operate within the region. This regulation is designed to enhance transparency, liquidity, and consumer protection in the rapidly evolving crypto market.

The introduction of MiCA has created a sense of urgency for major crypto platforms, such as Kraken and Crypto.com, to develop their own stablecoins in order to stay compliant with the new rules and maintain smooth operations. The regulation essentially forces these platforms to reduce their reliance on third-party stablecoin issuers like Tether and USD Coin (USDC), both of which are widely used in the crypto ecosystem but are issued by companies outside the EU’s jurisdiction. With MiCA in place, third-party stablecoins may face challenges if their issuers are not authorized under the new rules, which could impact the ability of crypto exchanges to use them seamlessly within the EU.

In response to these changes, Kraken is currently working on launching a dollar-backed stablecoin that will be issued through its subsidiary in Ireland. This move will allow Kraken to ensure its operations within the EU are in line with the new regulations, offering users the stability and convenience of a compliant stablecoin for transactions on the platform.

Crypto.com is also planning to launch its own stablecoin, slated for the third quarter of 2025. While the details about the specific fiat currency backing the stablecoin and other technical aspects are not yet fully disclosed, the company is aiming to position itself to meet the MiCA requirements and maintain a competitive edge in the market.

Stablecoins are digital assets designed to maintain a stable value, often pegged to traditional fiat currencies like the U.S. dollar or euro. They serve as a critical tool for crypto exchanges, providing a stable medium of exchange and a way to hedge against the volatility often associated with other digital assets. By issuing their own stablecoins, Kraken and Crypto.com aim to secure greater control over their operations, reduce exposure to regulatory uncertainties surrounding third-party stablecoin issuers, and continue offering their users a reliable means of converting cryptocurrencies to fiat.

As the crypto market evolves, the launch of these proprietary stablecoins could pave the way for further innovation in digital finance and set a new standard for compliance with regulatory frameworks worldwide.