EU crypto asset regulations are set to come into full force by the end of the year.
This has prompted several cryptocurrency exchanges within the European Union to delist the popular stablecoin Tether (USDT). The move has had a knock-on effect on the market for such tokens, as new issuers try to fill the gap while investors default to using the euro in cryptocurrency transactions. The new EU regulations aim to provide regulators with a deeper understanding of cryptocurrency flows and help prevent criminal activities such as money laundering. Blockchain forensics experts have noted that USDT is frequently used for such illicit activities. However, crypto executives warn that the Markets in Crypto Asset Regulation (MiCA) could ultimately drain market liquidity without achieving the EU’s goals, potentially reducing the EU’s appeal to digital asset traders at this critical juncture. Osman Ahmed, CEO of Zodia Markets, a cryptocurrency trading firm backed by Standard Chartered Bank, expressed his understanding of the rationale behind the move but noted that it is exclusionary and highly restrictive for EU clients, as USDT is the most liquid stablecoin, far outperforming others. Circle, Tether’s main competitor, received the necessary license in July.However, Tether has not yet obtained such a license, although it has not ruled out seeking one in the future. In the absence of a license, regulated exchanges must delist the token by December 30. Tether declined to comment on its plans regarding the cryptocurrency license.
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