The EU will ban USDT from December 30, mainly because the EU will fully implement new rules to supervise the cryptocurrency industry, namely MiCA (Markets in Crypto-Assets Regulation), by the end of this year.

​The regulation on stablecoin issuers under MiCA will take effect on June 30, requiring them to hold a formal electronic money authorization in at least one member state. However, Tether, the world's largest stablecoin issuer, has yet to obtain formal permission to issue its $120 billion USDT in Europe.

​As a result, cryptocurrency exchange Coinbase Global (iconCOIN.US) will remove all unauthorized stablecoin trading pairs, including USDT, from its cryptocurrency exchange in the European Economic Area by the end of this year. Other cryptocurrency exchanges, such as OKX, Bitstamp, and Uphold, have also taken action to delist the dominant stablecoin USDT to comply with the EU's strict crypto asset market regulations.

​The potential impacts of this initiative include:

Impact on investor sentiment: The withdrawal of USDT from the European market may severely damage investors' sentiment towards the entire stablecoin market, which has seen significant growth in overall market capitalization this year, with USDT accounting for about 70% of the total stablecoin market. Its core force being forced out of Europe, coinciding with the total stablecoin market cap reaching new heights, may trigger investor concerns about the stablecoin market.

Market chain reaction: This move is creating a chain reaction in the stablecoin market, with new stablecoin issuers seeking to fill the gap, while investors, under pressure from EU regulations, are defaulting to using the recently depreciated euro to trade cryptocurrencies.

However, it is important to note that while the EU bans USDT, this is limited to the EU region. Players in the cryptocurrency space in other countries and regions are not affected, and users trading on compliant platforms do not need to worry. For EU users, platforms for virtual currency trading are not limited to these compliant exchanges; there are also non-compliant but still "holding strong on the front line" centralized exchanges (CEX) and even decentralized exchanges.