The MiCA regulation will officially take effect from 30/12/2024, posing a major challenge to Tether with the risk of the USDT stablecoin being Delisted in Europe.
USDT hit by "FUD" of Delisting in Europe, Tether CEO denies. Image: CryptoSlate
On December 30, 2024, Crypto exchanges in the European Union (EU) will officially apply the MiCA regulation (Markets in Crypto Assets), requiring stablecoins to comply with strict standards of transparency and financial reserves. This is seen as a major turning point in the management of the crypto market in this region.
However, USDT, the world's largest stablecoin issued by Tether, is now facing the risk of being removed from European exchanges. The reason is that Tether currently does not meet the requirements set by MiCA.
On December 30th USDT will be Delisted from EU exchanges.
— MMCrypto (@MMCrypto) December 27, 2024
Not spreading FUD, but why not diversify your USDT into a few different stable coins. pic.twitter.com/Dg0q52uEWs
The EU's Markets in Crypto Assets (MiCA) law was initiated in September 2020 and passed in April 2023, is a comprehensive and unified crypto legal framework among members in the region. Within the regulatory framework, MiCA also sets a number of conditions for the issuance of stablecoins in Europe.
Supervised by the European Central Bank (ECB), this regulation requires all stablecoins to report periodically and fully on their collateral assets, transparently disclose their reserves to ensure the Liquidation and instant convertibility of the stablecoin.
As for Tether, the company has not conducted regular audits fully in accordance with MiCA standards, instead only providing asset verification reports(attestations) on a quarterly basis by a third party.
These reports only verify the total value of the collateral assets compared to the circulating USDT supply. However, they do not provide detailed information on the quantity, origin or Liquidation of the assets, making Tether ineligible to receive an operating license in Europe under the MiCA regulation.
This has led several leading EU exchanges like Coinbase, Crypto.com to announce the Delisting of USDT in the European market.
USDT TO Be Delisted from COINBASE
— Adaora Favour Nwankwo (@adaora_crypto) December 27, 2024
IF YOU HAVE ANY USDT on COINBASE ,swap to USDC
BEFORE 30TH DECEMBER, 2024. pic.twitter.com/WG0t8HNJjc
Due to the new MiCA (Markets in Crypto Assets) regulation, EU exchanges are required to Delist USDT by December 30, 2024
— ToraX (@torax_fi) December 28, 2024
Some exchanges have already started
Is this the end of crypto? What's next?
Let's find out 👇 pic.twitter.com/fHBY1npkgj
Additionally, some users have shared images showing that USDT is no longer appearing in the token search bar of Binance in the EU region, raising concerns that Binance will also soon remove this stablecoin.
🚨 🚨 BREAKING NEWS:
— Kenny Nguyen (@mrnguyen007) December 25, 2024
Binance is blocking European Users from receiving USDT (Tether). All European 🇪🇺 Crypto Exchanges must Delist USDT by December, 30th, 2024 due to MiCA Non-Compliance. 🪙
RLUSD will be the game changer for European Crypto Exchanges.#XRP #RLUSD #XRPETF 💎 pic.twitter.com/2LNPeHBmIe
The crypto community immediately raised a gloomy scenario for the entire market if USDT, the 3rd largest Crypto by market Cap, falls into crisis. Most believe that the Delisting of USDT in Europe will cause:
- Liquidity crisis: USDT is currently the largest stablecoin in the world, accounting for over 67% of the global stablecoin trading Liquidation. If USDT is removed from Europe, Liquidation on exchanges will drop sharply, causing the Crypto market to fluctuate in the near future.
- Risk of collapse: If Tether is forced to publicly disclose its reserves and fails to meet its previous claims, it will trigger a massive sell-off from users, igniting a crisis across the entire market similar to the haunting collapse of LUNA-UST.
Despite the rumors, USDT has maintained its stability, with the stablecoin's market Cap even hitting an ATH of $140 billion last week, and is currently fluctuating around $138.7 billion at a price of $0.9981, showing no signs of Depeg despite facing Delisting concerns.
USDT market Cap movement in the last 1 month. Image: CoinGecko (29/12/2024)
USDT is unlikely to collapse even if banned in Europe
Flexibility in the MiCA regulation
Starting from December 30, 2024, the MiCA regulation will officially take effect, but it will not immediately apply rigorously or create instant changes for stablecoins like USDT. Instead, MiCA will enter a transitional phase lasting 18 months, ending on 07/01/2026 with the following roadmap.
MiCA regulation roadmap
Some key points to note include:
- Organizations that have provided crypto asset services before the entry into force of MiCA (including Tether and other stablecoins) may continue to operate temporarily without being immediately banned.
- During the transitional period, organizations can apply for a simplified licensing process.
- No immediate impact on individual ownership: MiCA mainly focuses on regulating stablecoin issuers and exchanges, not restricting individual ownership or transactions. EU users can still hold USDT in Web3 wallets and on DEXs.
Therefore, after December 30, 2024, MiCA will start to apply with a clear implementation timeline, but this will not lead to the immediate delisting of stablecoins like USDT, allowing issuers time to adjust and comply with the regulations.
In addition, rumors about the possibility of USDT being delisted in the EU for not meeting MiCA requirements only have a localized impact, while the majority of the global market (US, Asia, and other regions) continues to use USDT as usual.
Unfollow all the clowns who said $USDT will become "illegal" in the EU
— Kaduna (@CryptoKaduna) December 27, 2024
Rephrase mfers. pic.twitter.com/7fLRpSVCPl
The Tether FUD cycle repeats annually
Almost every year, Tether (USDT) becomes the focus of FUD waves. However, history has shown that these allegations have never shaken the position of this stablecoin. From 2017 to the present, Tether has faced criticism and major investigations, including:
- 2017: Tether promised to conduct a full audit of its reserve assets. This was the beginning of doubts about the company's transparency.
- 2018: USDT was suspected of manipulating the Bitcoin price in 2017
- 2019: The New York authorities accused Bitfinex of using Tether's funds to "cover losses" of $850 million
- 2021: Tether and Bitfinex were fined $42.5 million over the issue of USDT collateralization
- 2022:
- Tether was ordered by the New York court to produce most of the documents related to USDT collateralization.
- USDT was declared to be back in the legal sights of the US.
Despite the ongoing allegations and investigations, USDT remains firmly in its position as the cornerstone stablecoin of the crypto market. The FUD waves, although constantly appearing, have become a familiar part of the journey for this company. Notably, instead of being negatively impacted, Tether has not only maintained its position but also continued to grow strongly over the years.
Additionally, many opinions suggest that each time FUD targets Tether and USDT, it is usually a signal that the market has hit a Dip and is about to experience strong growth in the upcoming period.
BITCOIN IS GOING TO $100,000 ?
— Ash Crypto (@Ashcryptoreal) October 26, 2024
TETHER USDT FUD ALWAYS MARK
THE MARKET BOTTOM
JANUARY 2019: BTC PUMPED 268%
AFTER USDT FUD
DECEMBER 2020: BTC PUMPED 255%
AFTER USDT FUD
JUNE 2023: BTC PUMPED 200%
AFTER USDT FUD
OCTOBER 2024: ???? pic.twitter.com/FBgNo30F6I
Tether has prepared in advance, investing in StablR to comply with MiCA regulations
Tether has shown proactiveness and a long-term strategy in facing the challenges posed by the MiCA regulations in Europe. Recently, the company announced an investment in StablR, a stablecoin provider in the EU, as part of its strategy to promote the adoption of digital assets that comply with regulations in the EU market.
This move by Tether indicates that the company is not only seeking to maintain its presence in the European market but also positioning StablR as a "backup plan" in case USDT cannot quickly meet the MiCA standards, ensuring that EU users continue to have access to the stablecoins provided by Tether, thus preserving the company's position.
A notable aspect of this collaboration is that StablR has integrated with Hadron - Tether's recently launched Real-World Asset (RWA) tokenization platform. Hadron allows the tokenization of almost any traditional asset, from stocks and bonds to fiat currencies.
According to Tether CEO, Paolo Ardoino, the Hadron platform is attracting attention from European financial institutions, and he even jokingly stated that "European institutions are queuing to use Hadron." This statement implicitly affirms the company's strong position, rather than the concerns being circulated in the community.
And Europe institutions are queueing to use Hadron 👀 https://t.co/Z31AacQWXv
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 27, 2024
Tether CEO's Response
Amid the rising FUD waves, Tether CEO Paolo Ardoino appears completely calm in the face of the rumors surrounding USDT. For him, this is just "business as usual" for Tether. Ardoino even humorously noted that FUD targeting Tether seems to have become an "indispensable ritual" in each crypto market Bull Run cycle.
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 28, 2024True.
Ain't a bull run without Tether FUD
When asked about USDT's ability to soon comply with MiCA regulations and concerns about many CEX exchanges potentially delisting this stablecoin, the Tether CEO bluntly asked the reverse question: "How many exchanges have actually announced the delisting of USDT?" and in fact, only Coinbase has confirmed this.
That's not "many" exchanges.
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 27, 2024
We shall see. I remain confident 😊
He emphasized:
"The announcement of delisting by one exchange cannot be called 'many' as you say. I will remain confident in USDT."
In addition, Paolo Ardoino, CEO of Tether, did not hesitate to criticize the FUD targeting Tether, claiming that these are organized but ineffective efforts from competitors. With sharp words, he declared:
"If you look at the X bios of the people creating FUD about Tether, you will easily recognize their motives. This is a poorly coordinated campaign, loosely coordinated, driven by competitors."
If you look in the X bios of many of the people FUDding Tether, it's easy to understand their play.
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 27, 2024
A poorly coordinated campaign, pushed by competitors.
It won't work as it never worked.
Seguimos.
Notably, the community quickly discovered that the posts targeting USDT were related to the XRP community. This coincidence became clear when Ripple, the blockchain company behind the XRP Ledger, announced the launch of the RLUSD stablecoin on December 17, raising suspicions that the Tether FUD could be part of a strategy to pave the way for RLUSD and position this stablecoin as a "safer" alternative to USDT.
🧐
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 28, 2024
Compiled by Coin68
