With the Markets in Crypto Assets Regulation (MiCA) regulation coming into full force in the EU, the future of USDT, Tether’s flagship stablecoin, faces mounting uncertainty. As of now, the company has yet to obtain the necessary authorization to legally operate in the region.
Under the MiCA regulations, which took effect on June 30 this year, issuers of asset-referenced tokens (ARTs) and e-money tokens (EMTs), including stablecoin issuers, must secure proper registration if they seek to run their businesses in the EU.
EU Issues
On July 1 (briefly after MiCA became effective), Circle, the company behind the second-largest stablecoin USDC, said it received an e-money license from France’s Autorité de Contrôle Prudentiel et de Résolution (ACPR), French central bank’s financial regulatory authority.
The authorization allows Circle to issue its stablecoins, USD Coin (USDC) and Euro Coin (EURC) in the EU. The company also became the first global stablecoin issuer to comply with regulatory standards.
Since securing approval, USDC’s market cap has surged by approximately 35%, rising from $32.2 billion to $43.7 billion, CoinGecko data shows. Over the same period, EURC’s market value has rocketed over 130% to around $84 million at press time.
With a market value of $137 billion, USDT is still dominating the stablecoin market. Yet ongoing uncertainty surrounding its legal status in the EU may result in further losses of market shares. Data shows that USDT’s market cap dropped nearly 10%, from $138.7 billion to $137.4 billion within 24 hours.
Ahead of MiCA’s full application deadline, a number of cryptocurrency exchanges took steps to comply with the new rules. Bitstamp and OKX announced the delisting of USDT and EURT, Tether’s Euro-pegged stablecoin, earlier this year.
Coinbase said in an October statement that it would cease support for non-compliant stablecoins within the European Economic Area (EEA) by the end of the year. The policy will affect six stablecoins, including USDT.
In contrast, major exchanges like Binance, Kraken, and Crypto.com are still evaluating the situation without any official delisting announcement.
Tether Invests in MiCA-compliant Stablecoin Issuer
Rather than focusing on USDT’s compliance in the EU, Tether is now prioritizing other initiatives that allow it to reach the market, of course, in compliance with the legal framework.
Earlier this month, Tether announced its investment in StablR, a stablecoin issuer that recently obtained an Electronic Money Institution (EMI) license in Malta. The license enables the firm to issue its Euro-pegged stablecoin, EURR, in the EU.
The move followed Tether’s decision to end its support for EURT in late November. Apart from backing StablR, the company also revealed plans to issue two new stablecoins targeting the European market, EURQ and USDQ.
Tether said that these stablecoins are developed in partnership with Quantoz Payments and are powered by Tether’s Hadron technology, a new platform that delivers the necessary tools for stablecoin issuance, anti-money laundering management, and more.
Yet ongoing developments have not been able to keep the FUDs away. People love USDT, no matter how much doubt surrounds the back end of the project.
Addressing concerns about USDT’s future, and its potential delisting from trading platforms, Tether CEO Paolo Ardoino stressed that no EU regulators have stated that USDT is a non-compliant token. He also implied that FUD was rivals’ attempt to desperately “make you believe things that don’t exist.”
Plus, many in the cryptocurrency have shared support for Tether. Samson Mow has defended Tether, saying that the FUDs are from those unaware of Tether’s strong position or those who are driven by an “agenda.”
The expert noted Tether’s link to Cantor Fitzgerald, the prominent firm led by Howard Lutnick, Trump’s newly appointed Commerce secretary, though Lutnick is expected to step down once the Senate confirms his role.
