Tether Faces Major Setback as Crypto.com Removes USDT Amid MiCA Rules
- Crypto.com suspends USDT and other tokens to comply with MiCA rules.
- Users have until March 31 to convert assets to compliant ones.
- Tethers future in Europe is uncertain after regulatory delisting decisions.
Crypto.com has announced it will delist Tether (USDT) and nine other tokens in Europe to comply with the EUs MiCA regulations. The platform will stop purchases on January 31 and give users until March 31 to convert assets to compliant alternatives.
Crypto.com Delists USDT and Nine Tokens in Europe
Crypto.com has announced it will delist Tether (USDT) and nine other cryptocurrencies from its European platform on January 31, 2025. This decision follows the implementation of the EUs Markets in Crypto-Assets (MiCA) regulations.
In compliance with MiCA regulations, Crypto.com will suspend purchases of USDT and other affected tokens. The delisting includes Wrapped Bitcoin (WBTC), Dai (DAI), Pax dollar (PAX), Pax gold (PAXG), PayPal USD (PYUSD), Crypto.com Staked ETH (CDCETH), Crypto.com Staked SOL (CDCSOL), Liquid CRO (LCRO), and XSGD (XSGD). The exchange will continue to allow withdrawals of these tokens until the end of the first quarter.
As a result, Crypto.com users holding the delisted tokens must convert their assets to MiCA-compliant ones by March 31, 2025. Those who fail to comply will have their holdings converted to a stablecoin or asset of equivalent value. This move by Crypto.com reflects the growing importance of regulatory compliance in the cryptocurrency industry.
Europe Enforces Strict Crypto Regulations
The European Securities and Markets Authority (ESMA) recently advised European crypto asset service providers (CASP) to restrict non-compliant stablecoins by January 31. Tethers delisting is a direct result of these new regulations, which require stablecoins to maintain more than 60% of their reserves in recognized banks. The MiCA framework also mandates that stablecoin issuers obtain an e-money license to operate in the European region.
The MiCA regulations impose strict rules on stablecoin issuers, aiming to enhance market stability and protect users. Tethers failure to meet these requirements could prompt other exchanges to follow Crypto.coms lead.
Impact of MiCA Rules on the Stablecoin Market
Tethers removal from major platforms such as Crypto.com and Coinbase has raised concerns about its future in Europe. The exchanges decision highlights Tethers struggle to meet the new regulatory standards. The lack of transparency regarding Tethers reserves has further complicated its position in the market, with competitors like USD Coin (USDC) gaining favor for their more transparent operations.
The future of stablecoins in Europe depends on how issuers adapt to MiCAs requirements. Although Tethers dominance in the global stablecoin market remains unchallenged,there is uncertainty about its position in Europe. The next few months will determine whether Tether can regain its foothold or if competitors like USDC will seize the opportunity.
As exchanges and stablecoin issuers navigate these changes, the market may experience shifts in liquidity and trading efficiency. The long-term effects of these regulations will likely reshape the crypto industry across Europe.
Disclaimer:
The information provided on this website is intended for general informational purposes only and does not constitute professional financial advice. Users should conduct their own research and consult with a licensed financial advisor before making any investment decisions. By using this site, you acknowledge and accept that you are solely responsible for your investment choices and any associated risks.
Read more: https://www.tronweekly.com/mica-rules-forces-crypto-com-to-delist-tether/
Text source: TronWeekly
