- Tether’s market capitalization fell 1.5% over the past seven days after wider MiCA regulations for crypto-asset service providers in the Eurozone came into effect on December 30
- These rules impose stricter requirements on global stablecoin issuers, prompting some European exchanges to begin delisting USDT
Leading stablecoin Tether (USDT) saw its market capitalization decline by 1.5% over the last week, dropping to $137.32 billion from $139.46 billion following the implementation of Markets in Crypto-Assets (MiCA) regulations on December 30.
As the new framework takes effect, several European exchanges have started removing USDT from their platforms. These delistings have contributed directly to the reduction in USDT’s market share and overall capitalization within the region.
MiCA rules affecting stablecoins
Ratified in June 2024, the MiCA regulatory framework aims to govern dollar-denominated stablecoins such as USDT and USDC to curb their dominance within the EU while promoting euro-pegged stablecoins for payments and settlements.
The rules do not ban dollar-pegged stablecoins outright—users can still hold them in decentralized wallets—but they impose stricter requirements on these tokens. For example, issuers face obligations like maintaining a portion of reserves in traditional bank accounts, which could affect liquidity and operating costs, and dollar-pegged tokens are limited on registered exchanges operating in the EU.
Industry participants have noted that much of USDT’s trading volume and transactional activity occurs outside Europe, particularly in Asia and the United States, where MiCA provisions do not apply. This distribution of activity has led some observers to downplay the long-term impact of the new rules on Tether’s global usage.
Meanwhile, Tether’s CEO Paolo Ardoino highlighted the stablecoin’s continued trading strength, noting that by December 31 Tether’s daily trading volume remained significantly higher than that of the second-largest stablecoin.
🔥 https://t.co/IAOAkFjvM8
— Paolo Ardoino 🤖🍐 (@paoloardoino) December 31, 2024