- Tether‘s USDT market value decreased by over 1% to $137.24 billion, marking the largest weekly decline since November 2022.
- European Union exchanges and Coinbase removed USDT trading due to MiCA regulation compliance requirements.
- The market cap reduction follows USDT’s all-time high of $140.72 billion recorded in mid-December 2023.
- Asian markets represent 80% of USDT trading volume, potentially limiting the impact of European restrictions.
- EU traders can maintain USDT in self-custody wallets but cannot trade on regulated exchanges.
Tether’s USDT stablecoin experienced its steepest weekly market value decline since the FTX collapse, dropping over 1% to $137.24 billion amid regulatory pressures in Europe. The decrease follows multiple European cryptocurrency exchanges’ decisions to remove USDT trading pairs in response to new regulatory requirements.
MiCA Regulatory Impact
The Markets in Crypto-Assets (MiCA) regulation, which became fully operational on December 30, has prompted Binance.com/en/square/post/18332721703321″>EU-based exchanges and Coinbase to delist USDT. The regulation introduces two distinct categories:
- Asset-referenced tokens (ARTs): Cryptocurrencies maintaining stability through multiple assets
- E-money tokens (EMTs): Digital assets pegged to a single national currency
Market Impact Analysis
Despite initial market concerns, analysts suggest limited global implications. Karen Tang from Orderly Network indicated that the impact would likely remain confined to the eurozone, citing the EU’s relatively small share of global crypto trading volume.
Supporting this view, cryptocurrency analyst Bitblaze reported that Asia accounts for approximately 80% of USDT’s $44 billion daily trading volume, suggesting minimal fallout from European restrictions.
In response to regulatory challenges, Tether has invested in MiCA-compliant companies StablR and Quantoz Payments, demonstrating efforts to adapt to European regulatory requirements while maintaining its position as the dominant stablecoin by market capitalization.
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