According to PANews, the European Union's crypto asset regulations are set to take full effect by the end of the year, prompting several cryptocurrency exchanges within the EU to delist the popular stablecoin Tether's USDT. This move is impacting the market for such tokens, with new issuers attempting to fill the gap, while investors are defaulting to using the euro for cryptocurrency transactions.
The new EU regulations aim to provide regulators with a deeper understanding of cryptocurrency flows and help prevent criminal activities such as money laundering. Blockchain forensics experts have noted that USDT is frequently used in such illicit activities. However, cryptocurrency executives warn that the Markets in Crypto-Assets (MiCA) regulation might ultimately drain market liquidity without achieving the EU's objectives, potentially diminishing the EU's appeal to digital asset traders at this critical juncture. Usman Ahmad, CEO of Zodia Markets, a crypto trading company supported by Standard Chartered Bank, expressed understanding of the rationale behind the move but noted that it is quite exclusionary and restrictive for EU customers, as USDT is the most liquid stablecoin, far surpassing others.
Tether's main competitor, Circle, obtained the necessary license in July. However, Tether has not yet acquired such a license, though it has not ruled out the possibility of pursuing one in the future. In the absence of a license, regulated exchanges must delist the token by December 30. Tether has declined to comment on its plans regarding an electronic money license.