Tether’s US dollar stablecoin experienced its largest drop since FTX fell during the slow 2022 crypto market period. On-chain statistics revealed that Tether’s stablecoin usdt 0.14 percent. Tether lost around 1.2% of its market capitalization this week as EU digital asset restrictions went into full force on December 30. 

The token’s market capitalization decreased to $137 billion from its December high of $140 billion, fuelling speculation over Tether’s future and possible USDT volatility. Concerns have arisen that USDT’s operator may leave the European Union now that new legislation have been implemented. 

However, industry executives and observers challenged social media opinion with evidence demonstrating USDT’s endurance outside of the EU.

Nothing burger

Experts and researchers disregarded reports that the EU’s Markets in Crypto-Assets Regulation will impair USDT’s operations. Karen Tang, Orderly Network’s head of APAC partnerships, and social media expert Axel Bitblaze both remarked that the USDT continues to dominate the Asian and US marketplaces.

Bitblaze estimates that Asia accounts for around 80% of USDT trading volume. Tang stated that MiCA restrictions are more likely to stifle the EU’s digital asset expansion due to “convoluted overregulation.” 

Tether plots MiCA compliance

Speculation regarding USDT’s future in the EU increased in late 2024, when Coinbase and many EU-based exchanges delisted it, citing MiCA compliance problems. While the stablecoin rules went into effect in July, the whole MiCA framework was implemented by the end of the year.

MiCA mandates stablecoin operators to have specific licenses for e-money tokens and trading asset-referenced tokens, such as USDT. Circle USDC0.01% USDC is currently the only major stablecoin issuer to obtain a MiCA authorisation.

Tether invests in EU-based companies like StablR and Quantoz to prepare for regulatory compliance. CEO Paolo Ardoino has reiterated that the company has no intention of quitting the EU. USDT cannot be traded on MiCA-compliant exchanges, although traders can temporarily hold the stablecoin in non-custodial wallets.

Buy and sell crypto in minutes with 0.20% trading fees at Bitdenex  Exchange