As of December 29, 2024, Tether (USDT) has not been universally banned. However, several regions have imposed restrictions or are considering regulatory actions affecting its use:
European Union (EU): The EU's Markets in Crypto-Assets (MiCA) regulations, set to be fully implemented by December 30, 2024, require stablecoin issuers to obtain specific licenses and comply with stringent requirements. Tether Limited, the issuer of USDT, has not secured the necessary licensing under MiCA. Consequently, exchanges operating within the EU are preparing to delist USDT to comply with the new regulations. This move is expected to impact market liquidity and trading activities within the EU.
United States: Proposed legislation, such as the Lummis-Gillibrand Payment Stablecoin Act, aims to regulate stablecoin issuers by imposing reserve requirements and other regulatory measures. Analysts suggest that if such legislation is enacted, it could limit or prohibit the use of USDT within the U.S., potentially affecting its global dominance in the stablecoin market.
China: Chinese authorities have intensified their crackdown on cryptocurrency activities, explicitly targeting the use of USDT in illegal foreign exchange transactions. The Supreme People's Procuratorate has declared that using USDT as an intermediary in currency exchanges is illegal, leading to increased enforcement actions against such activities.
In other regions, such as Canada, exchanges like Coinbase have suspended USDT trading for users to comply with local regulatory requirements.
While these regional restrictions affect the availability and use of USDT in specific markets, there is no global ban on USDT. Users should stay informed about the regulations in their respective jurisdictions, as the legal status of USDT varies across different regions.