The post MiCA Regulations Loom: Is Tether’s USDT Facing Delisting in Europe? appeared first on Coinpedia Fintech News
While the EU’s cryptocurrency regulations are poised to take full effect in just a few days, there’s still significant uncertainty about Tether’s USDt stablecoin.
Uncertainty Over Tether’s MiCA Compliance
Recently, crypto exchange Coinbase delisted Tether’s USDT in mid-December citing compliance with the EU’s MiCA regulations. Even after Coinbase delisted USDT, the stablecoin has continued trading across the EU, as many exchanges await more clarity from European authorities on USDT’s compliance with MiCA.
Notably, a member of the technical committee of the MiCA Crypto Alliance has remarked that the EU regulators have not explicitly stated USDT’s compliance with MiCA, but this does not imply that the stablecoin is not seen as non-compliant in Europe.
“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, he remarked.
Noting that the exchanges like Binance or Crypto.com continuing USDT trading, Ibañez said that there are no reasons for crypto exchanges to delist USDT on the same date as Coinbase. He further added that Coinbase’s decision may reflect a proactive approach to avoid last-minute compliance risks or regulatory uncertainty, and could be a precautionary approach.
More Delistings Ahead?
As the EU’s MiCA regulations are set to take effect on December 30, Ibañez suggested that USDT delistings in the EU are still likely to come. He noted that exchanges may either delist USDT simultaneously, progressively, or adopt a “wait-and-see” approach, awaiting further statements from regulators. However, Ibañez argued that the “wait-and-see” approach doesn’t make much sense relative to other MiCA requirements which could entail too much regulatory risk.
Recently, Bloomberg noted that European crypto exchanges must delist Tether’s USDt by Dec. 30. However, as of the latest updates, European regulators have not provided official guidance on this matter.
MiCA Regulations Could Impact Market Liquidity
Notably, crypto executives have warned that the MiCA regulations may reduce market liquidity without meeting their intended goals, potentially making the EU less attractive to digital-asset traders at a crucial time.
Usman Ahmad, CEO of Zodia Markets, explained that the removal of USDT, the most liquid stablecoin, limits options for EU clients. While Stablecoins like USDT are essential for crypto traders to transfer funds, move money across borders, and settle traditional assets, concerns have grown about their use in illegal activities, as witnessed in recent reports of Russian networks using USDT for illicit transactions.
However, Tether has condemned these illegal uses and emphasized its commitment to preventing such activities. The removal of Tether (USDT) from platforms in the EU is expected to significantly reduce liquidity, as USDT has the most trading pairs globally. Traders are likely to face disruptions as they move away from USDT to other stablecoins or fiat pairs.
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