MiCA Threatens USDT’s Future in Europe as Potential Ban Looms in 4 Days
Tether (USDT), the largest stablecoin by market
capitalization, may face removal from European exchanges due to non-compliance
with new Markets in Crypto-Assets (MiCA) regulations. The deadline for
compliance is December 30, 2024, raising uncertainty among market participants.
“No regulators have explicitly stated that USDT isn’t
compliant, but this does not mean that it is,” Juan Ignacio Ibañez, a member of
the Technical Committee of the MiCA Crypto Alliance, told Cointelegraph.
MiCA Non-Compliance Threatens USDT Ban
The MiCA framework was introduced to standardize and oversee
crypto operations in the European Union. However, Tether has reportedly failed
to meet compliance requirements. Jacob Kinge, a financial analyst and value
investor, noted that Tether has not issued new coins in over two weeks. He
warned that non-compliance could lead to a formal ban, disrupting liquidity and
increasing transaction costs on European trading platforms.
Joseph Hurtado, founder of Granata Consulting, expressed
concern over the broader impact of such a ban. He suggested it could weaken
Europe’s position in the tech and cryptocurrency sectors. The crypto community
remains divided, with some supporting stricter regulations to stabilize the
market, while others fear significant disruptions.
🚨BREAKING: On December 30, $USDT will be delisted from EU exchanges! $RLUSD will be the new standard in the stablecoin market and #XRP will bridge every $RLUSD transaction! pic.twitter.com/UhXt7kSm3z
— JackTheRippler ©️ (@RippleXrpie) December 27, 2024
USDT Criticism Grows over Audits
Criticism of Tether’s operations has also resurfaced. Jason
Calacanis, host of the All-In Podcast, questioned the company’s lack of audits
by major firms despite holding substantial reserves. Tether relies on assurance
reports from BDO Italia, an accounting firm. Meanwhile, crypto
advocate Teddy Bitcoin argued that the halt in new Tether issuance might
reflect reduced market demand rather than regulatory challenges.
Tether’s CEO, Paolo Ardoino, defended the company’s
approach, emphasizing its focus on practical use cases for USDT and Bitcoin. He
highlighted the efforts to expand its network in collaboration with industry
partners.
Coinbase Warns Users About Stablecoins
Meanwhile, Coinbase
has informed its users that it may delist stablecoins not compliant with
the MiCA regulations, including USDT. This warning comes as the enforcement
deadline for MiCA approaches, as reported by Finance Magnates.
This action is in line with MiCA’s e-money authorization
requirements, which mandate that stablecoin issuers obtain regulatory approval
in at least one EU member state. Coinbase has advised users to convert holdings
in non-compliant coins to alternatives like USD Coin (USDC), which meets MiCA
standards.
This article was written by Tareq Sikder at www.financemagnates.com.