⚠️Tether USDT is facing the risk of being delisted from exchanges in Europe, which could start as early as today (some exchanges have already delisted USDT) due to non-compliance with the MiCA regulation. There is a lot of misinformation about this event; what is the truth?

1- If you are not in Europe, this does not affect you.

2- The MiCA regulation has provisions that allow stablecoin issuers to operate in Europe, including a 1:1 reserve requirement, having a banking license, or depositing funds in a bank in Europe, etc.

3- MiCA has a compliance period of about 18 months, meaning that the law is effective now but companies have about 18 months to comply.

4- Tether has stated that they choose not to comply with MiCA, while other companies like Circle (USDC) agree to comply.

This immediately puts Tether USDT at risk of being delisted in Europe and raises the question: Why did they choose not to comply? What are they hiding? Is USDT really backed 1:1?

Proving a 1:1 reserve might be an issue, but we will not know the exact answer, and these concerns have existed in the market for many years. However, there is also another perspective on profitability to consider regarding this issue.

Tether is on track to generate massive profits this year – over 10 billion USD in net profit. They also had significant profits last year, and in Q2 of 2022, their net profit even surpassed that of BlackRock.

Simply put, Tether's business model is that customers deposit money, they issue USDT tokens, and charge fees for this service. However, most of the actual profits come from using cash reserves to invest in interest-generating assets like U.S. government bonds.

The MiCA regulation requires 30% of reserves to be held in a bank, which means Tether will have to forgo a large portion of profits since they cannot earn interest on that amount. Instead, they are using this profit to buy Bitcoin, gold, and other assets to strengthen their financial position.