Binance and Kraken Remove USDT (Tether) from Their Operations in Europe

This change specifically affects users located in the European Union, where MiCA regulation has introduced stricter measures for the handling and use of stablecoins.

On April 2, both Binance and Kraken announced the removal of USDT (Tether) from their European operations in response to new regulatory pressures imposed by MiCA regulation. This change, specifically affecting users located in the European Union, is a direct consequence of the introduction of stricter measures for the handling and use of stablecoins stipulated by the European legislation.

What the European regulations provide for

MiCA (Markets in Crypto-Assets Regulation) is a new European regulation that aims to more strictly regulate the use of cryptocurrencies, including stablecoins. The main objective of MiCA is to ensure the stability of the European financial system, while offering greater protection to investors and institutions. In particular, MiCA establishes stringent requirements for stablecoin issuers, including transparency and capital reserve requirements. This regulation has led to significant changes in the European cryptocurrency market, forcing some platforms to remove or restrict the use of non-compliant stablecoins.

The operational changes of Binance and Kraken

With the introduction of MiCA, Binance suspended the use of the USDT on the spot market for European users, although they are still allowed to hold the token and use it in perpetual futures contracts.

Kraken, on the other hand, opted for a different solution, allowing European users to sell only the USDT they already hold, but not allowing new purchases or exchanges of the token. These changes were necessary to align with new MiCA regulations, which impose restrictions on the treatment of non-compliant stablecoins.

These changes affect a wide range of users in Europe, who now have to seek alternatives for the use of stablecoins. USDT is not the only stablecoin to have been removed from exchange platforms in Europe. Other stablecoins, such as FDUSD and DAI, have undergone similar changes due to MiCA regulation. Tether, despite being the market leader, has seen its position challenged by regulation, but the removal has not affected his stablecoin exclusively, indicating a broader impact on dollar-linked cryptocurrencies.

The USDT in the global market: capitalisation and trading volumes

Despite the removal of the USDT from European platforms, the token remains the dominant stablecoin globally. Its market capitalisation is currently $144 billion, a figure that puts it well ahead of its direct competitors. Moreover, the USDT continues to be the most traded stablecoin, with daily volumes far exceeding those of other stablecoins.

In the context of stablecoin regulations, attention is also shifting to the US. The ‘Stable Act’, a bill that will regulate stablecoins, may also influence Tether’s position outside Europe in the future. This bill requires stablecoin issuers to operate as banking institutions, requiring them to have an official licence to operate.

Despite the regulatory difficulties that Tether may face, the USDT continues to maintain a strong position in the global market, although increasing regulatory intervention may change the competitive landscape.