David Edwards
According to CoinMarketCap, the market value of Tether (USDT), the biggest stablecoin in the world, fell by $2.5 billion in a single week, from $140.5 billion to $138 billion. The European Union’s upcoming MiCA (Markets in Crypto-Assets) framework is putting increasing regulatory pressure on the industry at the time of this collapse.
MiCA Regulations and Tether’s Repercussions
Stablecoin issuers are required by the EU’s MiCA legislation to obtain particular licenses in order to conduct business within its borders. Several European exchanges have proactively delisted USDT ahead of the regulatory crackdown after Tether allegedly failed to meet these requirements.
Market Attitude: Overreaction or FUD?
Despite concerns about how MiCA will affect Tether’s position in Europe, experts say the effects might not be as bad as expected. USDT can still be used legally in decentralized trading platforms and non-custodial wallets, even though MiCA-compliant exchanges are not allowed to list the stablecoin.
Axel Bitblaze, a cryptocurrency analyst, has minimized the EU’s possible impact. The analyst pointed out that 80% of USDT’s trading volume comes from Asia, dampening the EU’s blow.
USDT Continues to Rule the Market
Tether’s trading volumes are strong despite the uncertainties. The stablecoin’s dominant position in international cryptocurrency markets is highlighted by the fact that it consistently outperforms the total trading volumes of the top ten cryptocurrencies.
In order to assure compliance with changing frameworks, Tether has also taken proactive measures to address regulatory issues, such as reducing its EU operations and investing in MiCA-compliant alternatives.
