Tether’s market capitalisation slid 1.5% over the last seven days as broader MiCA regulations across crypto asset service providers in the Eurozone kicked in on Dec 30.
These regulations include some stringent rules for global stablecoin providers as some European exchanges have begun to delist USDT.
Leading stablecoin Tether (USDT) has lost 1.5% of its market capitalisation over the last seven days, falling to $137.32Bn from $139.46Bn after broader MiCa regulations kicked in on Dec. 30.
Per the regulations, European exchanges have begun to delist USDT from their crypto lineup, directly contributing to USDT’s falling market share and capitalisation.
MiCA rules around stablecoins
The Markets in Crypto Assets (MiCA) regulation was approved in June 2024, however, the broader regulatory framework for crypto asset service providers kicked in on Dec. 30.
According to the new framework, dollar-denominated stablecoins like USDT and USDC are regulated to limit their dominance within the EU, encouraging the use of Euro-pegged stablecoins for settlements and transactions.
While dollar-pegged stablecoins are not outrightly banned (users can hold them in decentralised wallets), they are subject to stricter rules (like maintaining a 30% reserve in traditional banks, which could impact cash flow) and are restricted on registered exchanges within the EU.
Comments from industry insiders remain unfazed as the bulk of USDT trading and transactions come from Asia and the US, where USDT is not restricted.
Meanwhile, Tether CEO, Paolo Ardoino, retweeted a post citing that Tether’s daily trading volume outpaced the second-largest stablecoin by 14x by Dec. 31.
🔥 https://t.co/IAOAkFjvM8
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 31, 2024
