Will Tether disappear from Europe for good now that MiCA is going to ban the stable?

The crypto world is in turmoil now that the new rules of MiCA, the Markets in Crypto-Assets Regulation, have come into effect. These regulations have a major impact on the future of stablecoins such as Tether (USDT) in the European Union. We will briefly explain how this works.

What is MiCA?

MiCA is a comprehensive legal framework that applies to all EU countries and regulates digital assets and related services. The aim of MiCA is to stimulate innovation, protect consumers, ensure market integrity and support financial stability in the EU crypto market.

The impact on Tether and other stablecoins

The most notable change is the introduction of strict rules for the issuance and services of stablecoins. Companies that want to issue stablecoins in the EU must apply for a license and meet strict requirements.

For “significant” stablecoins, such as Tether (USDT), the requirements are even stricter. These stablecoins fall under the direct supervision of the European Banking Authority (EBA) and must meet additional requirements for capital, liquidity and risk management.

Tether’s Uncertain Future in Europe

Tether has already announced that it will not apply for a license in the EU, due to what it considers unfair regulations. Some exchanges have already responded to the new rules. For example, OKX has stopped supporting USDT trading pairs in the EU and has Bitstamp and Uphold already delisted several stablecoins, including USDT, from their platforms. Kraken has indicated that they are reviewing the status of USDT, including a possible delisting.