What It Means for USDT

The European crypto scene is changing fast, and Tether (USDT) is in trouble. Crypto.com has announced it will remove USDT from its platform by January 31, 2025. This follows coinbase coinbase – [email protected] WalletCentralised Exchange decision to drop Tether last year. The future of its $138 billion USDT in the EU is uncertain, and the possibility of other regions delisting is spreading like fire, all because of the strict new rules under the EU’s Markets in Crypto-Assets (MiCA) regulations. Crypto analyst Jacob King broke the news, highlighting how this could impact stablecoins and crypto trading.

Nothing is going in the right direction for Tether and these regulatory problems can severely impact the stablecoins movement globally. 

Why is Tether Being Delisted?

MiCA’s new rules make it tough for stablecoins to stay in the European market. One key requirement is that stablecoins must keep over 60% of their reserves in recognized banks and get an e-money license. Moreover, Tether hasn’t met these rules, leading major exchanges to remove it.

USDT is the most-used stablecoin in the world, but its lack of transparency has always raised concerns. Unlike other stablecoins, Tether doesn’t provide frequent or detailed audits of its reserves. This has led to doubts about whether it holds enough assets to back all the USDT in circulation.

What Happens Next?

Tether’s removal could shake up the crypto market. USDT is a major player in trading, helping traders move funds quickly between crypto and fiat. Without it, liquidity—how easily assets can be bought or sold—could take a hit.

To be on the safer side, some traders are already switching to fiat trading pairs, but this could create new problems. With fewer stablecoin options, trading might become less efficient, and prices could fluctuate more.

USDC vs. Tether – Who Wins?

USD Coin (USDC) could benefit from Tether’s struggles. USDC is seen as more trustworthy because it provides monthly audits and keeps its reserves in regulated banks. It also follows strict U.S. financial laws, making it a safer bet for exchanges looking to stay compliant with MiCA. If more exchanges follow Crypto.com and Coinbase, USDT could lose its dominance, and USDC might take its place as the go-to stablecoin in Europe.

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The Future of Stablecoins in Europe

Stablecoin issuers will have to follow MiCA’s rules or risk being pushed out of the market. More exchanges may delist non-compliant stablecoins, leading to a shift toward regulated alternatives. For now, Tether remains the world’s top stablecoin, but its future in Europe looks uncertain. The next few months will be crucial in shaping the stablecoin market under these new regulations.

Global Scenario

In other news, Senator Elizabeth Warren is challenging Howard Lutnick, Trump’s Commerce Secretary nominee, over his firm’s ties to Tether. She’s demanding details on Cantor Fitzgerald’s investments and whether it ensured Tether complied with anti-money laundering laws. Warren argues that Tether’s links to illicit transactions pose a national security risk.