- Coinbase delisted USDT as MiCA guidelines became effective.
- USDT market cap has dropped by $4B as insiders called the delisting a ‘Tether FUD.’
In mid-December, crypto exchange Coinbase delisted Tether’s USDT from its platform, citing ‘non-compliance’ with EU’s crypto regulation MiCA (Markets in Crypto Assets Regulation), one of the most robust crypto standards that became effective on the 30th of December.
As one of the largest USD-pegged stablecoins by market cap, Tether’s USDT has enjoyed dominance until recently, when the market began re-adjusting to MiCA’s guidelines.
According to a recent Kaiko report, Circle’s USDC, the largest MiCA-compliant stablecoin, could gain more market share after USDT’s delisting.
Regulator’s silence on USDT status
Despite Coinbase’s move, the regulator and adviser for MiCA compliance, ESMA (EU Securities and Markets Authority), has not officially communicated USDT’s compliance status as of this writing.
Binance and other exchanges have reportedly restricted some USDT services for EU users. Part of the 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.”
So, does the ESMA’s silence mean USDT could be non-compliant?
According to Juan Ignacio Ibanez, a technical member of the EU crypto compliance advocacy group MiCA Crypto Alliance, the silence from regulators didn’t suggest USDT is compliant. In an interview with Cointelegraph, Ibanez said,
“No regulators have explicitly stated that USDT isn’t 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 advisory firm Jan3, called the delisting a ‘Tether FUD.’ He said,
“Other than Coinbase (who is invested in Circle) no other exchange has plans to delist USDt in the short term for European users. Local European regulators have a grace period of more than 12 months.”
Source: Coingecko
The ongoing EU shakeup has dragged USDT’s market cap from $141B to $137B. Other insiders warned that USDT delisting could affect liquidity in the EU markets and reinforce U.S. dominance.
