Tether (USDT), the largest stablecoin by market capitalization, may face removal from European exchanges due to non-compliance with new Markets in Crypto-Assets (MiCA) regulations. The deadline for compliance is December 30, 2024, raising uncertainty among market participants.

“No regulators have explicitly stated that USDT isn’t compliant, but this does not mean that it is,” Juan Ignacio Ibañez, a member of the Technical Committee of the MiCA Crypto Alliance, told Cointelegraph.

MiCA Non-Compliance Threatens USDT Ban

The MiCA framework was introduced to standardize and oversee crypto operations in the European Union. However, Tether has reportedly failed to meet compliance Compliance In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a Read this Term requirements. Jacob Kinge, a financial analyst and value investor, noted that Tether has not issued new coins in over two weeks. He warned that non-compliance could lead to a formal ban, disrupting liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term and increasing transaction costs on European trading platforms.

Joseph Hurtado, founder of Granata Consulting, expressed concern over the broader impact of such a ban. He suggested it could weaken Europe’s position in the tech and cryptocurrency sectors. The crypto community remains divided, with some supporting stricter regulations to stabilize the market, while others fear significant disruptions.

🚨BREAKING: On December 30, $USDT will be delisted from EU exchanges! $RLUSD will be the new standard in the stablecoin market and #XRP will bridge every $RLUSD transaction! pic.twitter.com/UhXt7kSm3z

— JackTheRippler ©️ (@RippleXrpie) December 27, 2024

USDT Criticism Grows over Audits

Criticism of Tether’s operations has also resurfaced. Jason Calacanis, host of the All-In Podcast, questioned the company’s lack of audits by major firms despite holding substantial reserves. Tether relies on assurance reports from BDO Italia, an accounting firm. Meanwhile, crypto advocate Teddy Bitcoin argued that the halt in new Tether issuance might reflect reduced market demand rather than regulatory challenges.

Tether’s CEO, Paolo Ardoino, defended the company’s approach, emphasizing its focus on practical use cases for USDT and Bitcoin. He highlighted the efforts to expand its network in collaboration with industry partners.

Coinbase Warns Users About Stablecoins

Meanwhile, Coinbase has informed its users that it may delist stablecoins not compliant with the MiCA regulations, including USDT. This warning comes as the enforcement deadline for MiCA approaches, as reported by Finance Magnates.

This action is in line with MiCA’s e-money authorization requirements, which mandate that stablecoin issuers obtain regulatory approval in at least one EU member state. Coinbase has advised users to convert holdings in non-compliant coins to alternatives like USD Coin (USDC), which meets MiCA standards.