The European Union’s recent regulatory moves have sent shockwaves through the crypto industry, with Tether (USDT), the world’s largest stablecoin, facing significant challenges. As the EU approves ten stablecoin issuers under its Markets in Crypto-Assets (MiCA) framework, Tether’s exclusion raises questions about its future dominance.
Tether Excluded as MiCA Clears 10 Stablecoin Issuers in Europe
The EU has approved ten stablecoin issuers under MiCA, marking a pivotal moment in cryptocurrency regulation. However, Tether, with its $141 billion market capitalisation, was notably absent from the list. This exclusion has led to the delisting of USDT on several crypto platforms for EU-based users, sparking concerns about the stablecoin’s future in the region.
Approved Issuers Include Major Players
The MiCA-approved list includes prominent names like Circle, Crypto.com, and Societe Generale. These firms have issued ten euro-pegged and five US dollar-pegged stablecoins. Meanwhile, Tether’s absence has left industry observers questioning the EU’s regulatory priorities
Tether’s Expansion Beyond the EU
Facing regulatory hurdles in Europe, Tether has shifted its focus to other regions. Recently, the company proposed acquiring a 51% stake in a South African energy company. Additionally, Tether has ventured into the sports industry, investing in Juventus to strengthen its presence in mainstream sectors.
MiCA Rules Could Isolate the EU Crypto Market
Industry experts warn that MiCA’s stringent regulations may isolate the EU’s crypto market. Natalia Latka, Director of Public Policy at Merkle Science, argues that the rules could discourage foreign firms from operating in the region. Similarly, local companies might relocate to avoid compliance costs, further weakening the EU’s position in the global crypto landscape.
Is Regulation Crushing Innovation in the EU?
Critics argue that the EU’s focus on compliance over innovation could stifle technological progress. Professor Steve Hanke highlights the bloc’s overregulation as a key factor behind its lagging GDP compared to the US. As crypto platforms delist USDT ahead of MiCA’s December 2024 deadline, the EU risks losing its competitive edge.
Kraken Joins the Wave of Delistings
Kraken recently announced it would stop supporting USDT and other stablecoins for European clients by March 31. This decision follows similar moves by Coinbase and Crypto.com, signalling a broader trend of delisting Tether in Europe. Despite these setbacks, Tether remains financially robust, reporting a record $13 billion in net profits in 2024.
Other Markets
While the EU crackdown poses challenges, Tether is exploring new opportunities elsewhere. El Salvador, known for its pro-Bitcoin stance and making Bitcoin legal tender, has welcomed Tether’s new headquarters. This strategic move could help the company offset potential losses in Europe and maintain its global influence.
Conclusion: A Bleak Future or a New Chapter?
Tether’s exclusion from MiCA-approved issuers has undoubtedly cast a shadow over its future in Europe. However, the company’s expansion into other regions and industries suggests it is far from defeated. As the crypto landscape evolves, Tether’s ability to adapt will determine whether it retains its throne or succumbs to regulatory pressures.
