Tether’s USDT, the leading dollar-pegged stablecoin, saw its market value drop by more than 1% to $137.24 billion this week, marking the sharpest decline since the FTX crash in November 2022. This decline follows the implementation of the EU’s Markets in Crypto-Assets (MiCA) regulations, which led several EU-based exchanges and Coinbase to delist USDT due to compliance issues. Despite the drop, USDT’s market cap was at a record $140.72 billion in mid-December. The MiCA regulation requires issuers to have a license for offering or trading asset-referenced tokens (ARTs) or e-money tokens (EMTs) within the EU. While EU traders can still hold USDT in non-custodial wallets, they can’t trade it on MiCA-compliant centralized exchanges. However, experts suggest that the impact of these delistings might be limited, with Asia accounting for 80% of USDT’s trading volume. Tether has invested in MiCA-compliant firms to ensure regulatory alignment.
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