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

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.