The European Union’s push to tighten regulation of crypto assets has put #Tether ’s USDT stablecoin in a difficult position.
Under the upcoming Markets for Crypto Assets Regulation (MiCA), stablecoin issuers will be required to hold an e-money license. This requirement could lead to Tether being delisted from some major European exchanges.
MiCA Regulations and Its Impact on USDT
MiCA aims to make European crypto markets more regulated and transparent, but these regulations also put a lot of pressure on existing stablecoins.
Because Tether was late in obtaining a license to meet these new requirements, many exchanges have begun delisting USDT by December 30, 2024.
While some major platforms like Coinbase are already in the process of delisting Tether, other exchanges are still waiting for clear guidelines from the European Securities and Markets Authority (ESMA), which points to an uncertain future for Tether and similar stablecoin issuers.
Expected Changes in European Crypto Markets
The potential delisting of Tether could have profound implications for liquidity and trading dynamics in crypto markets in Europe, as traders may shift to fiat currencies or other less liquid stablecoins over highly liquid stablecoins like USDT.
These changes could also affect Europe’s competitive position in global crypto markets, with experts noting that the regulations introduced by MiCA could lead to declines in overall crypto market liquidity, especially with the withdrawal of a widely used instrument like USDT.
Despite the current challenges in Europe, Tether management is determined to continue its commitment to the region. The company said it continues to support new MiCA-compliant stablecoin projects and aims to comply with the necessary regulations to maintain its presence in the European market.
In conclusion, the upcoming period for Tether and the European crypto market will bring many challenges along with the process of adapting to new regulations. It is a matter of curiosity how Tether will proceed in this process and how the crypto markets in Europe will react to these changes.