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

MiCA's regulation of stablecoin issuers will take effect on June 30, requiring them to hold formal electronic money authorization in at least one member state. However, Tether, the world's largest stablecoin issuer, has not yet obtained formal licensing 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 exchanges 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 action include:

Impact on investor sentiment: The withdrawal of USDT from the European market could severely damage investors' sentiment towards the entire stablecoin market, which has seen substantial growth in overall market capitalization this year. USDT accounts for about 70% of the total stablecoin market, and its core influence being forced out of Europe, coinciding with the total stablecoin market capitalization reaching new heights, could trigger investor concerns regarding the stablecoin market.

Market chain reaction: This move is generating a chain reaction in the stablecoin market, with new stablecoin issuers seeking to fill the gap, while investors, pressured by EU regulatory scrutiny, are defaulting to using the recently depreciated euro for cryptocurrency transactions.

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