EU’s Silence Won’t Make USDT MiCA-Compliant, Warns Executive

The European Union’s landmark cryptocurrency regulations, known as the Markets in Crypto-Assets Regulation (MiCA), are set to take full effect on December 30, 2024. However, questions about Tether’s USDt stablecoin’s compliance continue to cause uncertainty among exchanges and regulators.

While MiCA establishes clear rules for cryptocurrencies and stablecoins, there remains no official word from European regulators about whether USDt meets the required standards. This ambiguity is forcing market participants to tread carefully as the countdown to MiCA’s full implementation begins.

Coinbase’s USDT Delisting Sparks Debate

Coinbase’s recent decision to delist USDt in mid-December highlights the regulatory uncertainty surrounding MiCA. The U.S.-based exchange stated that the move was to ensure compliance with the new EU regulations. Despite this, other platforms like Binance and Crypto.com have continued trading USDt across the EU.

Juan Ignacio Ibañez, a member of the MiCA Crypto Alliance’s Technical Committee, emphasized that regulatory silence does not imply compliance. “No regulators have explicitly stated that USDT isn’t compliant, but this does not mean that it is,” he said.

Ibañez suggested that Coinbase’s decision might reflect a cautious approach to avoid potential regulatory issues. While some reports, including Bloomberg, speculated that exchanges must delist USDt by December 30, no such directive has been issued by European authorities.

Transition Period Adds Flexibility

As MiCA enters its final implementation phase, an 18-month transitional period offers some breathing room for crypto businesses. During this time, EU member states can implement “transitional measures” to allow existing crypto service providers to continue operating under national laws.

The European Securities and Markets Authority (ESMA), a key body overseeing MiCA compliance, has yet to clarify whether USDt is categorized as a restricted stablecoin. In October, an ESMA spokesperson confirmed ongoing discussions with market participants to address stablecoin-related concerns.

For now, the lack of definitive guidance leaves the fate of USDt in the EU uncertain. Industry stakeholders are closely watching for any updates that could reshape the stablecoin’s role in the European crypto market.