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

The regulation of stablecoin issuers under MiCA will take effect on June 30, requiring them to hold an electronic money license in at least one member state. However, Tether, the world's largest stablecoin issuer, has not yet obtained the official licensing certification to issue its $120 billion USDT in Europe.

As a result, cryptocurrency exchange Coinbase Global (COIN.US) will remove all unauthorized stablecoin trading pairs, including USDT, from its cryptocurrency exchanges located in the European Economic Area before 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 move include:

Impact on investor sentiment: The withdrawal of USDT from the European market could severely damage investor sentiment regarding the entire stablecoin market, which has seen a significant increase in overall market capitalization this year. USDT accounts for about 70% of the total stablecoin market, and its core presence being forced out of Europe coincides with the stablecoin market reaching new heights, which may trigger investor concerns about the stablecoin market.

Market ripple effect: This action is creating a ripple effect 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 for cryptocurrency trading.

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 excessively. For EU users, platforms that allow virtual currency trading are not limited to these compliant exchanges, as there are also non-compliant but still 'holding strong' centralized exchanges (CEX) and even decentralized exchanges.