The stablecoin may be removed from European exchanges if it fails to adhere to MiCA, a measure that seeks to standardize the market regulations for crypto assets in the EU.
Tether’s USDT stablecoin is subject to uncertainty as the deadline for adhering to the European Union’s MiCA (Markets in Crypto-Assets) regulations approaches on December 30.
The stablecoin may be removed from European exchanges if it fails to comply with MiCA, a measure that seeks to standardize the market regulations for crypto-assets in the EU. USDT has presently a market capitalization of approximately $140 billion and has accounted for nearly 68% of global stablecoin trading volume in the past year, according to DefiLlama.
USDT’s future in Europe is uncertain, which underscores the more extensive obstacles that the cryptocurrency industry is encountering as regulations continue to evolve. The delisting of USDT has the potential to disrupt liquidity, which could make it more difficult for users who depend on the stablecoin for transactional purposes to operate efficiently.
Due to compliance concerns with MiCA, Coinbase preemptively delisted USDT in mid-December. This could potentially lead to other exchanges, including Binance, adopting the same approach if Tether is unable to satisfy the rigorous standards.
According to Alan Orwick, co-founder of Quai Network, the availability of USDT on European platforms could be substantially restricted by these regulatory obstacles.
Tether has recently made an investment in StablR, a stablecoin issuer that is MiCA-compliant, in order to resolve this issue. “If Tether and StablR are unable to comply with the EU’s regulations by December 30, this could allow MiCA-compliant stablecoins such as USDC and Euro-based tokens to assume the lead,” Orwick stated.
Other exchanges continue to trade USDT, despite Coinbase’s decision. Platforms such as Binance and Crypto.com have elected to postpone any action until more definitive regulatory clarity is achieved.
MiCA was implemented in June 2023 with the objective of creating a unified legal framework for the 27 EU member states, thereby guaranteeing that regulatory standards are consistent throughout the region. Crypto firms were required to traverse a complex web of regulations and acquire numerous licenses in order to operate in various EU countries prior to the implementation of MiCA.
Verena Ross, Chair of the European Securities and Markets Authority (ESMA), stated in a press release that the MiCA regime’s implementation on December 30, 2024, represents a substantial advancement towards the establishment of a regulatory framework for the crypto market. “However, it is imperative to acknowledge that the new regime would not be sufficient to eradicate the inherent volatility and uncertainty in the crypto-assets market, and investors should have a comprehensive understanding of the risks before investing in this sector.”
Ross stated that ESMA will persist in its efforts to “ensure the seamless implementation of MiCA and to support a level playing field through supervisory convergence actions” by continuing to provide guidance and collaborate with all NCAs.
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