Due to European Union's Market in Crypto-Assets Regulation (MiCA), the crypto industry is experiencing significant upheaval. MiCA has led to the delisting of Tether's USDT and other tokens from major exchanges like crypto.com.
This regulatory framework, fully enforced since the end of 2024, requires stablecoin issuers to obtain an electronic money license from an EU member state, a requirement that Tether has not met.
Crypto.com declared on January 29, 2025, that it would delist Tether's USDT and nine other tokens by January 31, 2025. MiCA regulations, which require that non-compliant stablecoins be removed from EU exchanges, are the direct cause of this decision.
The deadline for users to convert their holdings into MiCA-compliant assets is March 31, 2025; if they don't, their assets will be automatically replaced with compliant alternatives.
Other exchanges, including Coinbase and Binance has also begun reviewing their offerings in light of MiCA. Coinbase previously delisted USTD in December 2024 for similar compliance reasons.
The urgency among exchanges to secure compliance has resulted in a competitive race to establish operations in jurisdictions that facilitate adherence to these new regulations, such as Malta.
Tether has expressed concerns over the rushed nature of these regulatory changes and their potential impact on market stability. The firm has criticized the lack of clarity surrounding the regulations and warned that sudden delistings could disrupt trading activities across Europe.
In spite of these challenges, Tether is reportedly working on developing new stablecoins that comply with the standards of MiCA and is considering relocating its operations to El Salvador to benefit from a more favorable regulatory environment.
Regarding the MiCA regulations, there is still disagreement in the crypto community. Advocates argue that more stricter regulations are necessary for market stability and consumer protection.
In contrast, critics worry that these measures could stifle innovation and decrease market liquidity by limiting the availability of popular stablecoins like USDT.
As MiCA reshapes the landscape of crypto trading in Europe, only those stablecoins that meet its stringent requirements are expected to thrive in this new regulatory environment.
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