USDT faces "FUD" of delisting in Europe, Tether CEO denies
The MiCA regulation will officially take effect from December 30, 2024, putting Tether in front of a big challenge with the risk of stablecoin USDT being delisted in Europe.
On December 30, 2024, cryptocurrency exchanges in the European Union (EU) will officially apply the MiCA (Markets in Crypto Assets) regulation, requiring stablecoins to comply with strict standards of transparency and financial reserves. This is considered a major turning point in the management of the cryptocurrency market in this region.
However, USDT, the world's largest stablecoin issued by Tether, is facing the risk of being removed from European exchanges. The reason is that Tether currently does not meet the requirements set by MiCA.
On December 30th USDT will be delisted from EU exchanges.
Not spreading FUD, but why not diversify your USDT into a few different stable coins. pic.twitter.com/Dg0q52uEWs
— MMCrypto (@MMCrypto) December 27, 2024
The EU Markets in Crypto-Assets (MiCA) Act, initiated in September 2020 and adopted in April 2023, is a comprehensive and unified crypto regulatory framework across the region. Within the regulatory framework, MiCA also sets out a series of conditions for the issuance of stablecoins in Europe.
Overseen by the European Central Bank (ECB), the regulation requires all stablecoins to regularly and fully report on their collateral assets, transparently hold reserves to ensure the liquidity and instant convertibility of stablecoins.
Tether, on the other hand, does not conduct a full MiCA audit, instead only providing quarterly attestations conducted by a third party.
These reports only verify the total value of collateral assets compared to the amount of USDT in circulation. However, they do not provide detailed information about the quantity, origin or liquidity of the assets, making Tether ineligible for a license to operate in Europe under MiCA regulations.
This has led many leading exchanges in the EU such as Coinbase, Crypto.com to announce the delisting of USDT in the European market.
USDT TO Be delisted from COINBASE
IF YOU HAVE ANY USDT on COINBASE ,swap to USDC
BEFORE 30TH DECEMBER, 2024. pic.twitter.com/WG0t8HNJjc
— Adaora Favor Nwankwo (@adaora_crypto) December 27, 2024
Due to the new MiCA (Markets in Crypto Assets) regulation, EU exchanges are required to delist USDT by December 30, 2024
Some exchanges have already started
Is this the end of crypto? What's next?
Let’s find out 👇 pic.twitter.com/fHBY1npkgj
— ToraX (@torax_fi) December 28, 2024
In addition, some users have shared images showing that USDT is no longer appearing on Binance’s token search bar in the EU region, raising concerns that Binance will soon remove this stablecoin as well.
🚨 🚨 BREAKING NEWS:
Binance is blocking European Users from receiving USDT (Tether). All European 🇪🇺 Crypto Exchanges must delist USDT by December, 30th, 2024 due to MiCA Non-Compliance. 🪙
RLUSD will be the game changer for European Crypto Exchanges.#XRP #RLUSD #XRPETF 💎 pic.twitter.com/2LNPeHBmIe
— Kenny Nguyen (@mrnguyen007) December 25, 2024
The crypto community immediately set out a dark scenario for the entire market if USDT, the third largest cryptocurrency by market capitalization in the entire market, falls into crisis. Most believe that USDT being delisted in Europe will cause:
Liquidity crisis: USDT is currently the largest stablecoin in the world, accounting for more than 67% of liquidity in global stablecoin trading. If USDT is removed in Europe, liquidity on exchanges will plummet, causing volatility in the crypto market in the near future.
Risk of Collapse: If Tether is forced to disclose its reserves and fails to meet its previous statements, it will trigger a massive sell-off from users, sparking a market-wide crisis similar to the haunting collapse of LUNA-UST.
Despite the rumors, USDT has remained stable, even setting an ATH of $140 billion in market capitalization last week, and is currently hovering around $138.7 billion at $0.9981, showing no signs of depegging despite concerns about delisting.
USDT unlikely to collapse even if banned in Europe
Flexibility in MiCA Regulation
After 30 December 2024, the MiCA regulation will officially come into effect, but will not immediately apply thoroughly or create immediate changes for stablecoins like USDT. Instead, MiCA will enter an 18-month transition period, ending on 01 July 2026 with the roadmap shown below.
Some key points to note include:
· Organizations that have provided crypto asset services before MiCA came into effect (including Tether and other stablecoins) can continue to operate temporarily without being immediately banned.
· During the transition period, organizations can apply for a license to operate under a simplified process.
· No immediate impact on individual ownership: MiCA is primarily focused on regulating stablecoin issuers and exchanges, not restricting individual ownership or trading. EU users can still hold USDT in Web3 wallets and on DEXs.
· Therefore, after December 30, 2024, MiCA will begin to apply with a clear implementation roadmap but will not result in the immediate removal of stablecoins such as USDT, giving issuers time to adjust to comply with the regulations.
In addition, rumors about the possibility of being delisted in the EU for not meeting MiCA regulations only cause local impacts, while the majority of the global market (US, Asia, and other regions) still uses USDT as usual.
Tether's FUD cycle repeats every year
Almost every year, Tether (USDT) becomes the center of FUD waves. However, history has shown that these allegations have never shaken the position of this stablecoin. Since 2017, Tether has faced criticism and major investigations, including:
· 2017: Tether promised to conduct a full audit of its collateral assets. This was the beginning of doubts surrounding the company's transparency.
· 2018: USDT was suspected of manipulating the price of Bitcoin in 2017
· 2019: New York authorities accused Bitfinex of using Tether's money to "cover a loss" of $850 million
· 2021: Tether and Bitfinex were fined $42.5 million over the issue of USDT stablecoin collateral
· 2022: Tether was ordered by a New York court to produce most of the documents related to USDT collateral.
Despite the allegations and lengthy investigations, USDT has remained firmly in its position as the mainstay stablecoin of the crypto market. Waves of FUD, though constant, have become a familiar part of the journey for this company. It is worth noting that instead of being negatively affected, Tether has not only maintained its position but also continued to grow strongly year after year.
In addition, many opinions say that whenever FUD targeting Tether and USDT appears, it is often a signal that the market has bottomed out and is growing strongly in the upcoming period.
Tether has prepared in advance, investing in StablR to comply with MiCA regulations
Tether has shown initiative and long-term strategy when facing challenges from MiCA regulations in Europe. The company recently announced an investment in StablR, a stablecoin provider in Europe (EU), as part of its strategy to promote the adoption of compliant digital assets in the EU market.
This move by Tether shows that the company is not only looking to maintain its presence in the European market but also to make StablR a “backup plan” if USDT cannot meet MiCA standards in time, ensuring that users in the EU continue to have access to stablecoins provided by Tether, maintaining the company's position.
The highlight of this cooperation is that StablR has integrated with Hadron - the real asset (RWA) tokenization platform that Tether launched at the end of November. Hadron allows the conversion of almost any type of traditional asset, from stocks, bonds to fiat money, into digital tokens.
According to Tether CEO Paolo Ardoino, the Hadron platform is attracting attention from European financial institutions, he even quipped: "European institutions are lining up to use Hadron." This statement implicitly affirms the company's strong position instead of the concerns that the community is spreading.
Tether CEO's Response
Amid the rising wave of FUD, Tether CEO Paolo Ardoino appeared completely calm about the rumors surrounding USDT. For him, this is no different from "everyday business" for Tether. Ardoino even humorously commented that FUD targeting Tether seems to have become an "indispensable ritual" in every bull run cycle of the crypto market.
When asked about the possibility of USDT soon complying with MiCA regulations and concerns that many CEX exchanges may delist this stablecoin, the Tether CEO bluntly asked the opposite question: "Currently, how many exchanges have actually announced the delisting of USDT?" and in fact, only Coinbase confirmed this.
He emphasized:
"The fact that one exchange announced the delisting cannot be called 'many' as you say. I will still keep my faith in USDT."
Additionally, Paolo Ardoino, CEO of Tether, did not hesitate to criticize the FUD posts targeting Tether, claiming that these were organized but ineffective efforts by competitors. In sharp words, he stated:
"If you look at the bios on X of the people who are creating FUD about Tether, you can easily see their motives. This is an ineffective, loosely coordinated campaign, driven by competitors."
It is worth noting that the community quickly discovered that the posts targeting USDT were related to the XRP community. This coincidence became clear when Ripple, the blockchain company behind the XRP Ledger, announced the launch of the RLUSD stablecoin on December 17, raising suspicions that the Tether FUD posts could be part of a strategy to build momentum for RLUSD and position the stablecoin as a "safer" option than USDT.
