Tether Excluded as MiCA Clears 10 Stablecoin Issuers in Europe

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.

The European Union has recently approved ten stablecoin issuers under its Markets in Crypto-Assets (MiCA) framework. However, Tether (USDT), the world’s largest stablecoin, was notably absent from the list. This exclusion has led to the delisting of USDT on several crypto platforms for EU-based users.

The EU’s approval marks a significant step in cryptocurrency regulation. Stablecoin issuers that have received approval include major players like Circle, Crypto.com, and Societe Generale. These firms have collectively issued ten euro-pegged and five US dollar-pegged stablecoins.

Despite its massive market capitalisation of $141 billion, Tether was surprisingly left out of the approved list. This decision has left industry observers questioning the EU’s regulatory priorities.

Faced with regulatory obstacles in Europe, Tether has been expanding its presence in other regions. Recently, the company announced its intention to acquire a 51% stake in a South African energy company.

Moreover, Tether has also made significant investments in the sports industry. The company’s partnership with Juventus aims to strengthen its presence in mainstream sectors.

While the EU aims to regulate the crypto industry, experts are concerned that MiCA’s stringent rules may isolate the bloc’s crypto market. Natalia Latka, Director of Public Policy at Merkle Science, believes the regulations could discourage foreign firms from operating in the EU.

Furthermore, to avoid the substantial compliance costs, local companies might relocate their operations, weakening the EU’s position in the global crypto market.

Critics also maintain that the EU’s prioritisation of compliance over innovation could stifle technological progress. Professor Steve Hanke points out the bloc’s overregulation as a key factor behind its lower GDP compared to the US.

As crypto platforms prepare to delist USDT ahead of MiCA’s December 2024 deadline, the EU may lose its competitive edge in the crypto domain.

Kraken recently announced that it will cease supporting USDT and other stablecoins for European clients by March 31. This decision follows similar moves by Coinbase and Crypto.com, indicating a broader trend of delisting Tether in Europe.

Despite these setbacks, Tether remains financially strong, having reported a record $13 billion in net profits for 2024.

While the EU crackdown presents challenges, Tether is also exploring new opportunities. El Salvador, which is pro-Bitcoin and has made the cryptocurrency 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.