Coinbase is preparing to delist non-compliant stablecoins in Europe by the end of 2024, but the status of Tether’s USDt, the world’s largest stablecoin, is not yet clear.
Coinbase told European customers on October 4 that it will restrict services for stablecoins that “do not meet the requirements” of the European Union’s Markets in Cryptocurrency Regulation (MiCA).
Coinbase plans to offer stablecoin options including USD Coin USDCUSD, which it co-issued with US cryptocurrency company Circle in 2018. The USDC stablecoin became one of the first stablecoins to become MiCA compliant in July.
Although Coinbase has not officially announced whether the upcoming restrictions will affect USDt USDTUSD, some reports and community discussions indicate that Tether could face challenges under the new regulations. Suggests. However, as of early October, USDT’s regulatory status in Europe remains uncertain.
Europe’s ESMA refuses to clarify whether Tether USDT is “non-compliant”
The European Securities and Markets Authority (ESMA), one of the main regulators of MiCA compliance, has not yet commented on the USDT situation.
Asked about Tether’s regulatory position under MiCA, an ESMA spokesperson declined to provide details, saying discussions were ongoing with market participants and other stakeholders.
Regarding MiCA’s third title “Asset Reference Token” and fourth title “Electronic Money Token,” the representative said the following.
“We note that the commencement of the application of Titles III and IV of MiCA has raised several questions among market participants, in particular regarding the impact that unlicensed stablecoin issuers will have on the activities of crypto asset service providers. We are aware.”
An ESMA spokesperson said the authority continues to actively consult with members and other stakeholders on how best to address these issues.
Titles III and IV are two of a total of nine titles under MiCA, and include the newly created 2% holding requirement for “reserve assets,” issuance of white papers, timely asset disclosure, regulatory approval, etc. requirements have been introduced.
Aspects of MiCA could increase risks to banks and stablecoins, says Tether CEO
While Tether has praised EU regulators for their efforts to establish a structured framework for stablecoins, the company believes there are risks associated with certain aspects of MiCA.
“Some aspects of MiCA could make the operation of EU-sanctioned stablecoins more complex and introduce new risks to both local banking infrastructure and the stablecoins themselves,” Tether CEO said. CEO Paolo Ardoino told Cointelegraph on October 9th.
To address these challenges and support European users, Tether is working on technology-based solutions tailored to the European market, Ardoino said. Tether plans to roll out the tool “in due course,” he added.
What part of MiCA does Tether relate to?
According to MiCA Crypto Alliance technical committee member Juan Ignacio Ibañez, Tether is mostly dissatisfied with MiCA’s reserve management requirements.
“They feel that it will disrupt their business models and investment strategies, but as a result of their unwillingness to comply with these regulations, they seem to choose not to comply with other regulations as well,” Ibáñez said. suggested.
If Tether decides to pursue MiCA compliance, the process will involve Tether’s strategic decisions, as such a move would be “giving up some degree of freedom in how its reserves are managed.” will be needed, the DSF official said, adding:
“It will be up to the Tether team to decide whether they are willing to continue with their current course of action to preserve this freedom, or whether they will quietly accept the demands of European regulators at the last minute in the face of a crisis.”Delisting outlook. ”
Tether’s USDT, which celebrated its 10th anniversary on October 6, is the world’s largest stablecoin with a market value of nearly $120 billion and more than 350 million users worldwide. Last week, Tether CEO Ardoino suggested the company may prioritize developing markets like Argentina over developed countries in the EU.
