Tether is discontinuing EURT due to the European Union's MiCA regulation. However, the company has invested in other stablecoins that comply with regulatory guidelines and will maintain revenue streams in the European market.
Several competitors saw MiCA as an opportunity to challenge Tether’s dominance in stablecoins in the EU, and the company has conceded part of that dispute.
Tether reacts to MiCA
On Wednesday (27), Tether announced via social media that it would discontinue EURT, its euro-backed asset. The company explained its decision in a blog post, adding that it had stopped minting the asset, and thus, current holders would have one year to redeem the EURT tokens.
“This decision is in line with our broader strategic direction, given the evolving regulatory frameworks around stablecoins in the European market. Until a more risk-averse framework is in place — one that fosters innovation and offers the stability and protection our users deserve — we have chosen to prioritize other initiatives,” the post said.
In other words, Tether chose this path for a clear reason: the imminent Markets in Crypto Assets (MiCA) law in the European Union. MiCA will transform crypto regulations in the EU and, in particular, reorganize the dynamics of stablecoins. In early September, several large companies openly considered MiCA as an opportunity to challenge Tether's European presence.
Competitors have already begun entering the EU market with MiCA-compatible stablecoins; the first was launched in September. Schuman Financial, a company founded by former Binance EU executives, launched its own asset yesterday. Other crypto sectors are also taking advantage of MiCA, with Revolut X expanding its business operations in Europe earlier this month.
Still, while Tether has ceded some of that market, the demise of EURT does not signal the end of Tether’s interests. The announcement was quite clear that Tether was a major investor in Quantoz’s MiCA-compatible stablecoin. Tether also promoted Hadron, its new solution designed to support issuers in creating and managing stablecoins.
In short, Tether is making a calculated withdrawal from the European market, not a full surrender. The company is maintaining multiple revenue streams in MiCA-compatible stablecoins and may re-enter the space at a later date. For now, the company has considerable resources to deal with this issue.
MiCA item makes Tether discontinue EURT; understand was first seen on BeInCrypto Brasil.