With the European Union’s new rules on cryptocurrencies, Tether’s USDT stablecoin is being closely examined to see if it meets the requirements. Coinbase recently said that they will get rid of stablecoins that don’t follow the EU’s Markets in Crypto-Assets Regulation (MiCA) by the end of 2024. This means that USDT might not be available on the site after all.
Europe’s Coinbase users were told on October 4 that the company would stop supporting stablecoins that don’t follow MiCA rules. The exchange wants to offer options that are compliant, like USD Coin (USDC), which was compliant earlier this year and is now available.
The European Securities and Markets Authority (ESMA) is still not sure if Tether’s USDT is thought to be not compatible. An ESMA official said that they are still talking with market players about what unlicensed stablecoins mean for crypto asset service providers.
Paolo Ardoino, CEO of Tether, said that MiCA adds some complexity that could make it harder for approved stablecoins to work and could also put local banking systems at danger. He said that Tether is working hard on a technology-based answer just for the European market to deal with these problems.
A member of the MiCA Crypto Alliance named Juan Ignacio Ibañez expressed worry that Tether might have trouble meeting the reserve management standards set by MiCA. He said that these rules might make Tether’s business model and investment plan less stable, which would force the company to think about its choices for complying.
Given that USDT is getting close to a market value of $120 billion and has more than 350 million users around the world, these legal talks have big effects. The result will have a big impact on how Tether does business in Europe and beyond.
