European Union’s Crypto-Asset Regulations Take Effect Amid Uncertainty Around Tether’s Compliance

MiCA in Effect in Europe, but Tether’s USDT Future Remains Uncertain

The European Union’s Markets in Crypto-Assets (MiCA) Act has officially come into effect, stirring uncertainty surrounding the future of Tether’s USDT stablecoin within the region. Despite its significant global popularity and vast market capitalization of $137.55 billion, Tether’s compliance with MiCA’s strict requirements is still unclear.

Under the new regulations, small stablecoin issuers must maintain 30% of their reserves in low-risk commercial banks within the EU, while larger players like Tether are required to keep 60% or more. These mandates pose significant challenges for Tether, as its massive capitalization and widespread adoption make compliance economically unfeasible without potentially disrupting the broader crypto ecosystem.

It is not yet clear if USDT meets the new norms, leaving its status within the EU’s single market in limbo. WeFi’s Head of Growth, Agne Linge, commented that while these mandates may pose significant challenges, Tether’s global prominence and substantial market capitalization make it less likely to face an immediate financial shock if it exits the EU.

It is also predicted that MiCA could prompt both small and large companies to exit the EU market, foster market integration, and increase operational and investment costs.

Source: http://www.cryptonewsz.com