2025-01-02
Europe's MiCA law to take effect on Dec 30,2024, experts analyze
the impact on the industry, both USDT and other market players expected to have
a hard time due to soaring compliance costs.
The European Union (EU) Markets in Crypto-Assets (MiCA)
legislation came into full force on December 30, marking a significant change
in the EU’s crypto regulatory landscape.
However, Tether, the world’s largest stablecoin issuer,
has yet to be certified as MiCA compliant, while European regulators remain
silent on USDT’s status under the new standard, raising uncertainty over its
future across EU member states.
The new EU
law now requires that small stablecoins issuers keep 30% of their reserves in a
low-risk commercial bank within the EU, while bigger players like Tether must
keep 60% or more in banks
Complying with this requirement may not be economically
viable, as it would disrupt the overall crypto ecosystem given Tether’s market
cap, global adoption, and usage.
Tether’s
large market capitalization and global adoption make it less likely to face
immediate financial consequences from a potential exit from the EU.
MiCA's
impact could push both smaller and
larger firms out of the EU due to the significant compliance costs and
investment requirements.
