USDT Stablecoin Faces EU Delisting Threat
The European Union’s cryptocurrency regulations are about to take full effect, but significant uncertainty remains regarding Tether’s USDT stablecoin.
In mid-December, U.S.-based crypto exchange Coinbase delisted Tether’s USDt, citing the need to comply with the EU’s Markets in Crypto-Assets Regulation (MiCA).
Despite this, the stablecoin continues to trade within the EU, as many exchanges await further guidance from European regulators on USDt’s compliance status under MiCA.
Although EU regulators have not explicitly stated whether USDt is MiCA-compliant, its compliance remains unclear. Juan Ignacio Ibañez, a member of the Technical Committee of the MiCA Crypto Alliance, explained the situation to Cointelegraph:
“No regulators have explicitly stated that USDT isn’t compliant, but this does not mean that it is.”
Ibañez noted that exchanges like Binance and Crypto.com have continued trading USDT, emphasizing that there is no immediate requirement for these platforms to follow Coinbase’s lead.
He suggested Coinbase’s decision might reflect a precautionary stance to mitigate compliance risks and regulatory uncertainties.
However, Ibañez warned that USDT delistings across the EU could still happen as MiCA’s enforcement begins on Dec. 30, stating:
“We should look at the Dec. 30 date. The question is whether all exchanges will delist USDT at once, whether it will be progressive or whether some will play a ‘wait-and-see’ game expecting statements from the regulators.”
According to Ibañez, a "wait-and-see" approach could entail excessive regulatory risk in the context of MiCA requirements.
Reports have surfaced suggesting that EU exchanges may be required to delist Tether’s USDt by Dec. 30.
However, European regulators have not issued definitive guidance on the matter.
Back in October 2024, the European Securities and Markets Authority (ESMA), a key MiCA compliance supervisor, declined to comment on whether USDt would be classified as a restricted stablecoin under the regulation.
An ESMA spokesperson at the time noted that the regulator was working with stakeholders to address stablecoin issues within MiCA’s framework.
As of Dec. 27, USDT remains actively traded on numerous European exchanges, including Binance EU and Crypto.com.
Crypto.com declined to comment on whether they plan to delist USDT in the EU soon.
Meanwhile, a Binance spokesperson confirmed that their June 2024 approach to non-MiCA stablecoins remains unchanged, stating:
“USDT remains supported for custody; deposits and withdrawals are not affected.
Nonetheless, we encourage users to use USDC and EURI as these are MiCA-compliant stablecoins.”
Although MiCA’s implementation phase ends on Dec. 30, 2024, the regulation includes a transitional period lasting up to 18 months within its total 36-month timeline.
ESMA has indicated that EU member states can adopt transitional measures allowing entities already offering crypto-asset services under national laws to continue operations during this phase.
One such measure is the "grandfathering" clause, which permits entities providing crypto-asset services in compliance with national laws before Dec. 30, 2024, to continue doing so until July 1, 2026, or until they receive or are denied MiCA authorization.
Additionally, a simplified authorization procedure will apply to entities already authorized under national law by Dec. 30, enabling them to transition more easily into MiCA compliance.
However, ESMA warned that this transitional phase might lead to differing levels of consumer protection across member states.
A list provided by ESMA outlines the varying grandfathering periods across EU and EEA countries.
For example, France and Estonia have opted for an 18-month period, while Austria, Greece, and Spain will implement a 12-month transition.
In contrast, countries like the Netherlands will have a six-month grandfathering period.
Sources:
https://cointelegraph.com/news/tether-usdt-eu-mica-compliance-uncertainty
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