Tether’s market valuation decreased by 1.5% over the past week as wider MiCA regulations affecting cryptocurrency asset service providers in the Eurozone commenced on December 30.
These regulations encompass strict guidelines for global stablecoin operators as several European exchanges have started to remove USDT from their listings.
Prominent stablecoin Tether (USDT) has experienced a 1.5% decrease in its market valuation during the previous week, dropping from $139.46bn to $137.32bn after the implementation of broader Markets in Crypto-Assets (MiCA) regulations on December 30.
According to these regulations, European exchanges have initiated the removal of USDT from their cryptocurrency offerings, directly affecting USDT’s declining market share and valuation.
MiCA regulations regarding stablecoins
Sanctioned in June 2024, the MiCA regulatory framework governs dollar-pegged stablecoins like USDT and USDC, aiming to curtail their prominence within the EU. Concurrently, it promotes the adoption of Euro-linked stablecoins for payments and transactions.
Although dollar-linked stablecoins are not completely prohibited (users may hold them in decentralized wallets), they face more stringent regulations (such as maintaining a 30% reserve in conventional banks, which could hinder liquidity) and are restricted on registered exchanges in the EU.
Feedback from industry experts remains steady as the majority of USDT trading and transactions originate from Asia and the US, where USDT faces no restrictions.
In the meantime, Tether CEO, Paolo Ardoino, retweeted a message highlighting that Tether’s daily trading volume exceeded that of the second-largest stablecoin by 14 times by December 31.
🔥 https://t.co/IAOAkFjvM8
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 31, 2024
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