TL;DR
Tether (USDT) has suffered a drop of more than 1% in its market capitalization due to the implementation of MiCA regulation in the European Union.
Several European exchanges have removed USDT from their offerings. However, the impact is mitigated by Tether’s strong presence in markets outside the EU.
Despite regulatory restrictions, experts point out that the impact of USDT’s drop will be minimal, and its adaptation to regulations could strengthen its position in the long term.
Tether (USDT) has experienced one of the largest drops in its market capitalization since the collapse of FTX in November 2022. The drop, which exceeds 1%, is linked to the effects of the implementation of MiCA (Markets in Crypto-Assets) regulation in the European Union. This regulation, which came into effect on December 30, 2024, requires stablecoin issuers to obtain a license to operate within the region.
As a result of the restrictions imposed by MiCA, several crypto exchanges in Europe, as well as Coinbase, have decided to remove USDT from their offerings. Despite this, the global impact has been limited. The majority of USDT’s trading volume comes from markets outside the European Union, particularly from Asia and the United States, which has helped mitigate the effects of the regulatory measures.
The drop in Tether’s market capitalization has sparked speculation about a possible loss of dominance of the stablecoin in the crypto market. However, experts have pointed out that the situation will likely not affect its position globally.
Tether (USDT): Bulletproof
USDT’s influence remains strong, and its use in non-European markets continues to be enormous. Furthermore, Tether has taken steps to ensure its compliance with European regulations by investing in companies like StablR and Quantoz Payments, which are already aligned with MiCA’s requirements.
Although MiCA regulation could limit access to USDT on some exchanges in the region, its impact on the global stablecoin market is considered to be minimal. Tether’s adaptation to the new regulatory frameworks in Europe could, in fact, strengthen its position in the long term by ensuring its operability in a region with increasingly complex regulations.
Although the brief drop in USDT is a challenge for the stablecoin market, the impact appears to be limited. Tether’s presence in the major crypto markets remains strong, and its ability to adapt to the new regulations will be crucial for its survival and dominance
