- Tether will phase out EURT, its euro-pegged stablecoin, by November 2025 in response to EU’s MiCA regulations
- Tether is focusing on developing MiCA-compliant stablecoins, like EURq and USDq, using its Hadron technology for regulatory compliance.
- EURT’s market share has decreased, while Tether’s USDt remains dominant, as MiCA adds complexity to stablecoin operations in Europe.
Tether, the largest stablecoin issuer, announced on November 27 that it will phase down EURT, its euro-pegged stablecoin, across all blockchains. Users can redeem their holdings until November 2025. The decision aligns with regulatory changes, particularly the EU’s Markets in Crypto-Assets Regulation (MiCA), which is changing the stablecoin market in Europe.
The European Securities and Markets Authority implements MiCA regulations, which require stringent controls for stablecoin issuers regarding sufficient capital and an anti-money laundering process. Tether has determined to advance plans that comply with these criteria. Discontinuing the use of EURT, the company seeks to drive the development of MiCA-compliant stablecoins.
MiCA’s Influence on Stablecoin Evolution
Financial Stability Issuers that are based within the EU are greatly affected by MiCA regulations. The document permits the operations of stablecoins and was earlier effective in April 2023, but it requires a stronger focus on KYC and other AML measures. Contained in it is a position that by 2024, it shall be a requirement for issuers to maintain enough reserves that will ensure full meeting of the deposit requirements embedded in the contracts to be issued sedimentary.
Tether’s CEO Paolo Ardoino previously criticized MiCA’s risks, claiming they complicate stablecoin issuance. Nevertheless, Tether’s Hadron technology now supports MiCA-compliant stablecoins. Hadron enables seamless blockchain integration, compliance automation, and AML enhancements, ensuring stablecoins like EURQ and USDQ meet regulatory standards while fostering innovation.
USDT has partnered with Dutch fintech Quantoz Payments to develop the EURq and USDq stablecoins, which are compliant with MiCA standards. Using Tether’s Hadron technology, these stablecoins focus on improving the creation and management processes while also embedding blockchain compliance and anti-money laundering provisions, thereby creating preconditions for stablecoin ecosystems that are robust enough to meet MiCA standards.
Tether’s Market Shift and Stablecoin Dynamics
After controlling the euro stablecoin sector with a market size of more than $500 million, EURT has a market capitalization of $27 million today, as competitors such as Stasis’ EURS and Circle’s EURC have since overtaken it. These MiCA-regulatory alternatives all have larger market shares on account of the shifting tide within Europe’s stablecoin ecosystem.
Tether’s USDt stays the dominant stablecoin with a market capitalization of 114 billion dollars while EURT sinks deeper in value. On the other hand, the MiCA rules represent a level of complications pertaining to USDt operations within Europe. A number of exchanges, specifically OKX, have put limits on USDt support for users within the European Economic Area.
Tether’s phased withdrawal of Stablecoin reflects its focus on fostering a compliant and innovative financial ecosystem. Investments in projects like Quantoz Payments’ stablecoins demonstrate its commitment to adapting to regulatory landscapes, aiming to redefine stablecoin utility within Europe’s evolving digital asset market.
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