Journalist
Posted:
- Coinbase delisted USDT when the MiCA guidelines came into effect.
- USDT’s market capitalization has fallen by $4 billion as insiders called the delisting a ‘Tether FUD’.
In mid-December, cryptocurrency exchange Coinbase removed Tether’s USDT from its platform, citing “non-compliance” with the EU crypto regulation MiCA (Markets in Crypto Assets Regulation), one of the most robust crypto standards that came into effect on December 30.
As one of the largest USD-pegged stable coins in terms of market capitalization, Tether’s USDT has enjoyed a dominant position until recently, when the market began to adapt to MiCA’s guidelines.
According to a recent Kaiko reportCircle’s USDC, the largest MiCA-compliant stablecoin, could gain more market share after the delisting of USDT.
Regulator silence on USDT status
Despite Coinbase’s move, the regulator and advisor for MiCA compliance, ESMA (EU Securities and Markets Authority), has not officially communicated USDT’s compliance status at the time of writing.
Binance and other exchanges have reportedly restricted some USDT services for EU users. Part of the stock exchange’s recent statement read,
“Binance announced its approach to non-MiCA stablecoins in June 2024, and there will be no changes until further notice. USDT remains supported for custody; deposits and withdrawals are not affected. We encourage users to use USDC and EURI as these are MiCA-compliant stablecoins.”
Does ESMA’s silence mean USDT is non-compliant?
According to Juan Ignacio Ibanez, a technical member of the EU crypto compliance advocacy group MiCA Crypto Alliance, the silence from regulators did not suggest that USDT is compliant. In an interview with Cointelegraph, Ibanez said:
“No regulator has explicitly stated that USDT is not compliant, but this does not mean that it is.”
However, some industry insiders pointed out that only Coinbase has delisted USDT.
Samson Mow, CEO of BTC nation-state consultancy Jan3, called eliminating a ‘Tether FUD.’ He said,
“Except for Coinbase (which invested in Circle), no other exchange has plans to drop USDt for European users anytime soon. Local European supervisors have a grace period of more than twelve months.”
Source: Coingecko
The ongoing turmoil in the EU has done just that towed USDT’s market cap from $141 billion to $137 billion. Other insiders warned that delisting USDT could affect liquidity in EU markets and strengthen US dominance.