Ahead of the EU’s Markets in Crypto Assets (MiCA) regulation, European exchanges are delisting Tether (USDT) en masse, which could severely hamper the ability to capitalize on the crypto bull market in the EU.
Donald Trump’s election in the US has benefited Tether along with the broader crypto industry, but market turmoil in the EU could disrupt investment.
Tether Prepares for MiCA
It has become clear over the past few months that Tether’s USDT, the largest stablecoin, has failed to meet MiCA’s requirements. According to a new report, EU exchanges have until December 30 to delist the asset. However, concerns are growing in the European crypto community, as Tether’s withdrawal could have a major impact on the region:
“I understand why this is being done to some extent, but it is quite exclusionary and restrictive for EU clients themselves because [USDT] is the most liquid stablecoin,” said Usman Ahmad, CEO of crypto trading firm Zodia Markets Holdings Ltd.
Essentially, Tether is a very useful stablecoin for crypto businesses in the EU and an important source of liquidity. Despite the high level of development and interest in the region, some European financial products are overshadowed by the US-centric market. Overall, crypto investments in the EU have declined in 2024 compared to other regional markets, and MiCA could cause them to decline further.
Tether has been preparing for MiCA by scaling back its services in Europe and instead investing heavily in new stablecoins that meet EU compliance requirements. However, some key competitors see this as a crucial opportunity to reduce Tether’s dominance in the market.
Meanwhile, there are concerns that potential regulatory chaos in the EU is occurring at a time when other regional crypto markets are booming. The country’s crypto industry has flourished since Donald Trump won the US presidency. Tether’s allies are receiving new appointments under Trump, and the company is making significant gains in the space.
European investors will have to hope that the turmoil surrounding MiCA and Tether’s withdrawal does not derail overall investment. Cryptocurrencies are entering a new level of institutional and regional adoption around the world, but Europe may still be missing out.
