Thomas Daniels
A notable decrease occurred in USDT, Tether’s USD-pegged stablecoin, which was the steepest since FTX’s crash in 2022. Tether’s market capitalization dropped by $1.4 billion when the EU’s extensive Markets in Crypto-Assets (MiCA) regulation went into effect on December 30. This brought the company’s December high of $140 billion down to $137 billion.
Speculation on Tether’s future in the EU has been stoked by the market activity. Concerns have grown about possible volatility and whether the legal change will cause Tether to lessen its market presence in the EU. Industry leaders, however, have responded to these worries with skepticism.
Analysts and stakeholders contend that USDT’s dominance is largely unaffected outside of the EU, despite MiCA’s strict licensing requirements for stablecoin issuers. According to Karen Tang, Head of APAC Partnerships at Orderly Network, Asian markets account for the majority of USDT trading volume, which is expected to be 80%. In a similar vein, social media analyst Axel Bitblaze pointed out that USDT is still a popular stablecoin in Asia and the United States, protecting its market share from laws unique to the EU.
Tang also attacked MiCA for being too complicated, arguing that rather than undermining USDT’s position in the global market, the regulatory framework would inhibit the development of digital assets within the EU.
Significant changes have already been made by EU exchanges in response to the implementation of MiCA’s stablecoin regulations. Notably, USDT was delisted by Coinbase and other platforms in late 2024 because to issues with complying with MiCA’s license requirements. According to the rules, issuers of asset-referenced tokens such as USDT and e-money must obtain certain authorizations; Circle, the operator of USDC, is the only entity that has done thus far.
Tether has demonstrated its dedication to managing the regulatory environment by investing in EU-based businesses like StablR and Quantoz in spite of these obstacles. While the company strives for compliance, traders can continue holding USDT in non-custodial wallets, according to CEO Paolo Ardoino, who has reiterated Tether’s commitment to stay operating in the EU.
Despite the challenges the MiCA framework presents for stablecoin issuers, USDT’s market position seems stable for the time being due to its substantial presence in non-EU countries. One of the most important questions for 2025 and beyond is whether Tether’s aggressive investments in compliance initiatives will maintain its presence in the EU.
