The European Union’s new cryptocurrency regulation, known as MiCA, is coming into effect.
Indeed, the rules regarding stablecoins in EU markets already came into force at the end of June, but there is time until December to comply with them.
USDT is the world's leading stablecoin and also the most widely used in Europe.
The new European regulation recognizes as true stablecoins backed by fiat currency only those issued by entities that are officially and legally recognized as authorized issuers of electronic currency, that is, fiat currency in digital format.
To this day, Tether, which is the issuer of USDT, is still not recognized by the EU as an issuer of electronic currency.
The important news, confirmed by Tether CEO Paolo Ardoino, is that Tether is working on a solution that could be ready by November, which is more than a month before the December 30 deadline.
It should be remembered that if USDT was not MiCA compliant after December 30, it would have to be delisted from exchanges for all users residing in EU countries.
While it remains decidedly unlikely that exchanges will allow the ability to legally offer USDT trading to be taken away from European citizens, from a theoretical point of view, this option remains absolutely possible.
For this reason, Tether is seeking a solution that would allow USDT to be MiCA compliant so that it can continue to be offered by exchanges to EU residents.
The solution is expected to be completed by December 30, but Ardoino confirmed that it could be ready as early as November.
The uncertainty
The problem is that it is not yet known precisely what kind of solution it is.
Ardoino himself simply stated that the details will be revealed later.
It will also be a new technological solution designed specifically for the European market, that is, to adapt USDT to the new regulatory scenario in the region.
Tether stated that certain aspects of MiCA make operating licensed stablecoins in the EU more complex, while also introducing new potential risks to both the local banking infrastructure and the stablecoins themselves.
One of the issues, raised by Tether itself, is the risk that the new regulation could lead to systemic risks for both banks and digital assets, making them vulnerable to problems due to, for example, mass withdrawals, as in the famous Silicon Valley Bank case last year.
It is worth noting, however, that the company praised the EU regulator for finally creating a clear and structured regulatory environment, although it emphasized how the use cases for stablecoins in Europe are very different from those in emerging markets and developing countries, where USDT is even more popular.
10 years of Tether and the latest news about the stablecoin USDT
On October 6, 2014, USDT was born.
At the time, Ethereum didn't even exist yet, as its blockchain was created the following year, and in fact the USDT token was initially launched on a Bitcoin sidechain called Omni.
Even today, of the more than 119 billion USDT in circulation, there are almost 900 million in the old Omni, although initially, in 2014, only less than 300,000 were issued.
In 2015 they surpassed 500 thousand, then surpassed one million in 2016.
The first boom came with the speculative bubble in cryptocurrency markets in 2017, which took USDT's market cap to over a billion dollars, an increase of x1000 in just under two years.
It should be remembered, however, that the price of USDT has always remained around $1, so only the usage has increased significantly, not the value.
The following year, the 2.5 billion mark was also surpassed, only to fall below 2 billion during the bear market.
The second big boom occurred from 2019, when 4 billion were surpassed, and continued until 2022, when 80 billion were reached.
During the 2022 bear market, USDT’s market cap fell below $70 billion, only to grow again in 2023 and surpass $90 billion first, and then even $100 billion in 2024. It now hovers around $120 billion.