Uncertainty and misinformation combined to drive declines in the USDT market.
Exchanges have a grace period of 6 to 18 months, to comply with MiCA.
With the recent entry into force of the Regulation on the Market in Cryptoassets (MiCA) in the European Union, USDT (Tether) has been in the eyes of many. This is due to expectations that the stablecoin will leave European territory and that unregulated exchanges will be left outside the region.
Tether’s market capitalization and its trading volumes have decreasedwhich some associate with the possibility that the crypto asset is being massively excluded from exchanges in Europe. However, a closer analysis of the data suggests that this perception may not be entirely accurate.
In a recent reportcryptocurrency service provider Matrixport stated that “this (decline) trend may be due to seasonal factors such as reduced trading volume during the Christmas and holiday periods.” Based on these comments, it can be deduced that the seasonal lull over the holiday season, as well as uncertainty and misinformation regarding the MiCA regulation combined to drive the decline in USDT trading.
Beyond this, it is noteworthy that, while some exchanges, such as Coinbase and OKX, decided to exclude USDT from their lists, others have not commented directly on the issue. For a leader in the digital asset industry like Samson Mow, what is in sight «no other exchange platform has plans to delist USDT in the short term for European users. He also recalled that local regulators have given a grace period of between 6 to 18 months for companies to comply with the regulations.
“Crypto asset service providers that provided their services in accordance with the applicable legislation on December 30, 2024, may continue to do so until July 1, 2026 or until authorization is granted or denied in accordance with the article 63. Whichever comes first”, reads article 143 of the regulations, corresponding to the transitional measures for service providers.
With this, it is clear that Cryptocurrency exchanges continue to comply with regulations and therefore they may keep USDT on their listings for longer.
The uncertainty over USDT arose due to the demands of MiCA, which for issuers of electronic money tokens (EMT), such as stablecoins, requires strict requirements, such as liquid reserves held by custodians authorized by the European Union and integration of identifiers of digital tokens (DTI).
In this regard, the CEO of Tether, Paolo Ardoino, has said that “the main problem is that the regulation foresees an enormous risk for stablecoin issuers, since they will have to keep 60% of the reserves in bank deposits.” He assures that such a requirement is almost impossible for Tether to meet.
The executive recalled that bank deposits are insured only up to 100,000 euros by the European Central Bank, a small figure compared to the volume moved by a stablecoin like USDT.
As far as is known, USDT is still not compliant with the MiCA regulation and, while it is not explicitly prohibited, its accessibility and use in the European Union may be affected as the ecosystem is configured under the standard. While that arrives, the truth is that USDT is still available on most regulated exchanges operating in Europe, such as Bitpanda and Kraken. Crypto.com, Nexo, Binance and YouHodler.
