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MiCA in Effect in Europe, but Tether’s USDT Future Remains Uncertain
The EU’s Markets in Crypto-Assets (MiCA) Act has officially taken effect, casting a shadow of uncertainty over the future of Tether’s USDT stablecoin in the European market. Despite its massive global popularity and significant market capitalization of $137.55 billion, Tether has not received compliance certification under MiCA, sparking concerns about its potential exit from the region.
The new regulations imposed by MiCA require stablecoin issuers to maintain strict capital reserve and liquidity standards, which may prove challenging for even the largest players like Tether. While smaller issuers are mandated to hold at least 30% of their reserves in low-risk commercial banks within the EU, larger entities such as Tether must adhere to a minimum of 60%. These requirements could be economically unfeasible without disrupting the broader crypto ecosystem.
The uncertainty surrounding Tether’s USDT stems from the lack of guidance provided by regulators on whether it meets these new norms. As a result, its status within the EU’s single market remains in limbo. While some exchanges have begun adapting to the new regulations, Coinbase Europe has taken a more drastic measure, removing stablecoins like USDT from its platform.
Despite potential regional disruptions, Tether’s operations remain strong, with WeFi’s Head of Growth, Agne Linge, stating that the company is on track to end the year with $10 billion in earnings. This high-profit margin highlights the resilience of Tether’s business model. Furthermore, the company has optimized its cash reserves to diversify its product offerings and investments, reducing risks associated with its stablecoin portfolio.
The question remains: will Tether choose to exit the European market or comply with the new regulations? The answer is far from certain, particularly in light of Coinbase’s decision to delist USDT and other stablecoins. Meanwhile, Binance and other exchanges have opted to maintain their stablecoin offerings.
Source: http://www.cryptonewsz.com
