Tether (USDT) Faces Delistings in Europe as MiCA Regulation Takes Effect

Things are going from bad to worse for Tether lately. After it learned only “lawful and legitimate” stablecoins would be considered worthy

Crypto.com announced that it will stop supporting the stablecoin Tether (USDT) in Europe as of January 31. The move comes in response to the European Markets in Crypto-Assets (MiCA) regulation, which requires strict anti-money laundering (AML) controls, among other obligations.

Crypto.com said it will delist USDT, PayPal USD, PaxDollar, and several other digital assets in Europe. Starting January 31, users will not be able to deposit or buy USDT, but withdrawals will be available until March 31.

The announcement comes several months after Tether decided to pull its EURT product, and more delistings are expected as the MiCA regulations take full effect.

Tether said it was disappointed with the “rushed actions” by exchanges, adding that the MiCA regulation will put European Union consumers at risk of a disorderly market.

The MiCA Regulation is the EU’s framework for regulating crypto assets, including stablecoins, exchanges, and other crypto-related services. They were passed in 2023 and implemented in 2024.

While MiCA rules are comprehensive and cover everything from digital asset issuance to how exchanges must conduct themselves, the stablecoin rules are the main concern for Tether.

The regulations stipulate that stablecoin issuers must have fully backed reserves and that the reserves be segregated to protect them.

Exchanges and wallet providers are evidently concerned about continuing to work with Tether. MiCA rules also require them to comply with the EU’s strict AML standards and facilitate increased transparency around conflicts of interest, fees, pricing, and more.

Since Tether has been linked to money laundering in international crime investigations and flatly refuses to submit to an audit by a respected accounting firm, it’s no wonder that legitimate exchanges are rushing to cut ties with the shadowy firm.

Although it’s not entirely clear what the Trump government’s stablecoin regulations will look like, there are some clues based on the President’s January Executive Order.

The first and most important is the term “lawful and legitimate” dollar-backed stablecoins used in the executive order. While Tether may be fully backed by dollars in 2025, it will be difficult to be considered “lawful” given its checkered history and several run-ins with U.S. authorities.

What would happen if the Trump stablecoin regulations made it so U.S. wallets and exchanges decided to dump Tether? Considering that it is by far the most traded token in digital currency markets and that BTC began its epic price run shortly after Tether went live, things could get messy.

When a Tether spokesperson warned that regulations like MiCA could create a “disorderly” market, they weren’t joking!

We’ll have to wait and see how American stablecoin regulations shape up before we find out what happens. But for now, it looks like the walls are closing in on Tether, and finally, it may be forced to show its hand or leave the table.