📣 Goodbye USDT? MiCA Regulations Redefine EU Crypto Trading
posted 4 hr ago
New EU regulations on crypto assets, set to take effect in a few days, are already reshaping the stablecoin market. Many European crypto exchanges are delisting USDT to comply with MiCA requirements, leaving investors searching for alternative stable assets.
The Markets in Crypto-Assets (MiCA) regulation is designed to enhance oversight of crypto transactions and combat money laundering. However, experts warn that it could lead to reduced liquidity and push investors out of the EU market. Industry leaders point out that USDT, as the most liquid stablecoin, plays a critical role, and its exclusion is creating significant challenges for European traders. Stablecoins pegged to fiat currencies remain essential for trading and transferring funds, but concerns over their misuse for illegal activities continue to drive regulatory scrutiny.
MiCA regulations require stablecoin issuers to obtain an electronic money license and hold a significant portion of their reserves in independent banks. Circle, the issuer of USDC and Tether’s main competitor, has already secured this license, while Paolo Ardoino has yet to comment on Tether’s plans. Without the license, USDT is set to be delisted from European exchanges by the end of the year.
Coinbase and Bitget announced the inevitability of this action in October, while OKX removed all USDT trading pairs back in April 2024.
USDT remains the leading stablecoin. Source: defillama
In the United States, the potential easing of cryptocurrency regulations under the Donald Trump administration could shift investments from Europe to the U.S. Venture capital investment in European crypto startups is declining, in contrast with growth in North America.
While the number of cryptocurrency holders in the Eurozone continues to rise, the removal of USDT could result in a significant drop in liquidity, as most crypto assets are traded against USDT. This would increase costs and create additional challenges for investors. For instance, on OKX, which has already delisted USDT, traders have unexpectedly turned to fiat pairs rather than migrating to alternative stablecoins—a development that surprised the exchange's management.
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