the stablecoin of Tether risks delisting

Latest news in the crypto world: yesterday, USDT, Tether’s stablecoin, turned 10 years old. 

However, this is not the most important news regarding USDT that came out during the weekend. 

Compliance with MiCA: latest news for the stablecoin USDT (Tether)

The new crypto regulation of the European Union, known as MiCA, is coming into effect. 

Indeed, the rules regarding stablecoins in the EU markets have already come into effect at the end of June, but there is time until December to comply. 

USDT is the leading stablecoin in the world, and it is also the most used in Europe.

The new European regulation recognizes as true fiat-collateralized stablecoins only those issued by entities that are officially and legally recognized as authorized issuers of e-money, that is, fiat money in digital format. 

As of today, Tether, that is the issuer of USDT, is not yet recognized by the EU as an issuer of e-money. 

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The solution

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The important news, confirmed by Tether’s CEO Paolo Ardoino, is that Tether is working on a solution that could be ready by November, which is more than a month ahead of the December 30 deadline. 

It should be remembered that if USDT were not compliant with MiCA after December 30, it would have to be delisted from exchanges for all users residing in EU countries. 

Although it remains decidedly unlikely that exchanges will allow the possibility of legally offering trades in USDT to be taken away from European citizens, from a theoretical point of view, this option actually remains absolutely possible. 

For this reason, Tether is seeking a solution that would allow USDT to be compliant with MiCA so that it can continue to be offered by exchanges to residents in the EU. 

The solution must be completed by December 30, but Ardoino has confirmed that it could be ready as early as November. 

The uncertainty

The problem is that it is not yet precisely known what type of solution it is. 

Ardoino himself limited himself to stating that the details will be revealed later. 

It will still be a new technological solution specifically designed for the European market, that is, to adapt USDT to the new regulatory landscape of the region. 

Tether has stated that certain aspects of MiCA make the operation of licensed stablecoins in the EU more complex, also introducing potential new risks for both the local banking infrastructure and the stablecoins themselves. 

One of the problems, raised by Tether itself, is the risk that the new regulation could lead to systemic risks for both banks and digital assets, making them vulnerable to issues due to, for example, mass withdrawals, as in the famous case of Silicon Valley Bank last year.

It is worth noting, however, that the company praised the EU regulator for finally creating a clear and structured regulatory environment, although it emphasized how the use cases for stablecoins in Europe are very different from those in emerging markets and developing countries where USDT is even more popular. 

The 10 years of Tether and the latest news on the stablecoin USDT

On October 6, 2014, USDT was born. 

At the time, Ethereum did not even exist yet, as its blockchain was created the following year, and indeed the USDT token was initially launched on a Bitcoin sidechain called Omni.

Even today, of the more than 119 billion USDT in circulation, there are almost 900 million on the old Omni, even though initially, in 2014, only less than 300,000 had been issued. 

Already in 2015 they exceeded 500,000, then surpassed one million in 2016. 

The first boom arrived with the speculative bubble of the crypto markets in 2017, which brought the market capitalization of USDT above a billion dollars, with an x1000 in just under two years. 

It should be remembered, however, that the price of USDT has always remained around $1, so only the usage has increased significantly, not the value. 

The following year, the 2.5 billion mark was also surpassed, only to fall back below 2 billion during the bear-market. 

The second major boom occurred starting in 2019, when 4 billion were surpassed, and it continued until 2022, when 80 billion were reached. 

During the bear-market of 2022, the market capitalization of USDT fell below 70 billion, only to grow again in 2023 and surpass first 90 billion and then even 100 billion in 2024. It now hovers around 120 billion dollars.