What will become of your USDT with the imminent arrival of the MiCA regulation?

MiCA regulations will soon come into full application

Adopted in April 2023 by the European Parliament, the MiCA (Market in-crypto assets) regulation aims to establish a global framework for cryptocurrenciesmost often qualified as digital assets by parliamentary bodies, within the European Economic Area (EEA).

On June 30, MiCA partially came into force. The first part focused on stablecoin issuers, which found obliged to respect certain rules to offer their product within the EEAparticularly at the level of collateralization (which must respect certain liquidity requirements), commercial communication, or even on the nature of the asset offered. This entails, among other things, the obligation to provide a publicly viewable whitepaper.

But on December 30, it will no longer only be stablecoin issuers who will be affected, but also digital asset service providers, the famous PSANs. This represents the majority of registered players, particularly exchanges, who wish to offer services relating to cryptocurrencies.

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In a few days, they will have to comply with MiCA regulations and therefore stop offering products that do not comply with the new rules, particularly in the stablecoin sector. A major issue: the stablecoin market is now worth more than $200 billion.

But the main one of them, Tether’s USDT – today capitalized at $139 billion, is still not MiCA compliant. What will become of him?

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What will become of Tether’s USDT in Europe?

As of this writing, Tether’s USDT should theoretically be removed from cryptocurrency exchanges affected by MiCA regulations on December 30. USDT is currently not compliant with the soon-to-be implemented regulationand Tether has even previously announced the gradual disappearance of EURT, its stablecoin backed by the euro yet intended to conquer the European market.

We contacted different crypto exchanges, who clarified (or not) their position regarding the USDT listing:

• Coinbase confirmed to us that USDT (in addition to other non-compliant stablecoins) could no longer be purchased, exchanged or traded on its platform since December 13;
• Deskoin told us that USDT as well as DAI could no longer be bought, exchanged or sold for the euro from December 31. Any remaining USDT balances after this date will be converted to USDC. Deposits in USDT will no longer be possible;
• Binance did not wish to communicate on the subject. Note that it is no longer possible to buy USDT on the platform, but that trading pairs with USDT are still offered, in particular the BTC/USDT pair;
• Kraken told us that they had no communication to make on the subject. USDT is still available on the platform without constraints.

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If the responses of the exchange platforms are also different, it’s quite simply because the regulations are still not clear. « No regulator has explicitly stated that USDT is non-compliant, said Juan Ignacio Ibañez, member of the Technical Committee of the MiCA Crypto Alliance, to our colleagues at Cointelegraph. “ But that doesn’t mean he is, » he clarified.

Last October, the European Securities and Markets Authority (ESMA), although a key player in the deployment of MiCA, could not say whether USDT should be restricted under the new regulations. And the situation doesn’t seem any clearer since.

This is why some exchanges seem to be waiting for a clear decision from regulators before delisting USDT, where others preferred to operate proactively such as Coinbase, or OKX, which removed the Tether stablecoin from its platform last March in favor of compliant stablecoins.

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This vagueness, as painful for companies as for investors, could also continue. Effectively, transitional periods will be established within the different Member States, lasting up to 18 months. This is the case of France for example, where other countries such as Spain will grant 12 months of flexibility for this purpose.

In any case, Tether, which has already clearly shown its disagreement with MiCA’s requirements, does not wish to stop there. It recently invested in Quantoz, a Dutch firm holding the famous electronic money institution (e-money institution) license, necessary to issue MiCA-compliant stablecoins within the EEA. The company offers 2 stablecoins, EURQ and USDQ, which should be available soon on Bitfinex and Kraken.

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Source : Cointelegraph