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MiCA Regulation Impacts USDT and Crypto Sphere in the European Union

The European Union's (EU) Markets in Crypto-Assets (MiCA) regulation has come into full effect on Monday (12/30). This has an impact on Tether, a stablecoin issuer, which was recently delisted from EU exchanges,

This is because the MiCA regulation requires stablecoin issuers to hold 30% of their reserves in low-risk commercial banks. On the other hand, large issuers like Tether are required to hold 60% of their reserves in banks.

"The new EU law now requires small stablecoin issuers to hold 30% of their reserves in low-risk commercial banks in the European Union, while larger players like Tether must hold 60% or more in banks," said Agne Linge, Head of Bank Growth at We Finance (WeFi).

The impact on the crypto market in the European Union has resulted in small and large companies leaving Europe. This is due to significant compliance costs and investment requirements.

“The new regulation will definitely push small companies, and some large companies, out of the EU. Because it requires not only compliance but also a significant increase in the investments that companies have to make to meet these requirements,” said Paybis Chief Revenue Officer Uldis Teraudkalns.

-# Images Source: Getty Images