The European Union’s Comprehensive Regulation of Markets in Crypto Assets (MiCA) is set to come into force on December 30, 2024, but uncertainty is clouding the compliance status of Tether’s USDT stablecoin, one of the world’s most widely used digital assets.
Coinbase, a leading US-based cryptocurrency exchange, preemptively removed USDT from its European services in early December 2024, citing MiCA compliance concerns. However, other major platforms such as Binance and Crypto.com have chosen to continue offering USDT in Europe.
Uncertainty regarding USDT compliance
Despite the impending enforcement of MiCA, European regulators have not explicitly stated whether USDT meets the new compliance standards. This regulatory silence has divided market participants. MiCA Crypto Alliance Technical Committee Member Juan Ignacio Ibañez stated: “No regulator has explicitly stated that USDT is non-compliant, but that does not mean it is compliant.”
Source: X
This move by Coinbase to delist USDT shows the company’s conservative approach to avoiding last-minute compliance risks. In contrast, other exchanges including Binance and Crypto.com remain open for USDT trading as they await further clarity.
Possible consequences of non-compliance
Industry experts warn that non-compliance with USDT could lead to significant disruption. Jacob Kinge, a financial analyst, noted that Tether has stopped issuing new coins in recent weeks, raising concerns about liquidity and transaction costs. “A formal ban on USDT would likely increase costs for traders and hurt market liquidity,” Kinge noted.
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