Tether’s USDT (USDT-USD), the world’s leading stablecoin, just experienced its sharpest market cap drop in two years. The coin’s value fell over 1% this week to $137.24 billion, marking the steepest decline since the FTX crash in 2022, according to CoinDesk. This tumble comes as European exchanges and Coinbase delist USDT over compliance concerns tied to the EU’s strict MiCA regulations, which fully kicked in on December 30.
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MiCA Regulation Pushes USDT Out of Europe
MiCA now demands stablecoin issuers obtain licenses to operate in the EU, targeting asset-referenced tokens (ARTs) like gold-pegged cryptos and e-money tokens (EMTs) such as USDT. In response, major EU-based exchanges have removed USDT from their platforms. While traders can still hold USDT in non-custodial wallets, they’re barred from trading it on MiCA-compliant exchanges.
Analysts Downplay Global Impact
Despite the uproar, some analysts believe the delisting’s effects will remain regional. Karen Tang of Orderly Network argued that “EU isn’t the largest crypto market…most crypto trading volume occurs in Asia and the U.S.” Meanwhile, crypto analyst Bitblaze highlighted Asia’s dominance, noting that 80% of USDT trading volume comes from the region.
Tether’s recent investments in MiCA-compliant firms suggest it’s bracing for the long regulatory road ahead.