Tether Criticizes MiCA-Driven USDT Delistings in Europe, Warns of Market Instability

Tether, the issuer behind the widely used USDt stablecoin, has voiced concerns over the impact of the European Union’s new Markets in Crypto-Assets (MiCA) framework, as major cryptocurrency exchanges are set to delist USDT in Europe. Tether has expressed disappointment over the quick actions being taken by exchanges in response to these regulations, cautioning that such measures could lead to significant disruptions in the European crypto market.

On January 29, 2025, Crypto.com, a leading global exchange, announced that it would begin removing Tether’s USDT stablecoin and nine other tokens from its platform in Europe starting on January 31. This move comes as part of Crypto.com's effort to comply with the MiCA framework, a set of regulations designed to bring greater oversight and control to the cryptocurrency sector in Europe.

Tether’s Concerns Over Regulatory Impact

Tether expressed disappointment in the swift nature of the delistings, with a spokesperson highlighting the lack of clear explanations behind these actions. "It is disappointing to see the rushed actions brought on by statements which do little to clarify the basis for such moves," Tether said, pointing to the broader risks posed by the regulatory changes to both consumers and the European market as a whole.

The company also warned that the changes under MiCA could lead to a “disorderly” market in the EU, particularly as the regulations are still in the early stages of implementation. Tether raised concerns that these actions, which extend beyond USDT to affect other tokens, could increase risks for consumers in Europe. "These changes affect many tokens in the EU market, not only USDt, and we fear that such actions will lead to further risk being placed on consumers in the EU," the spokesperson stated.

The Bigger Picture: Widespread Delistings and MiCA Compliance

Tether’s criticism follows similar actions taken by other major exchanges. For example, Coinbase delisted USDT in December 2024 to comply with MiCA regulations. The exchange confirmed it had removed six tokens, including USDT, from its platform, with plans to revisit stablecoin services once MiCA-compliant options become available.

Crypto.com’s MiCA-driven delisting process is set to affect not only USDT but also popular tokens like Wrapped Bitcoin (WBTC) and Dai (DAI). These moves reflect the growing influence of MiCA on the European cryptocurrency landscape, as exchanges adjust to the regulations' requirements.

Tether’s Strategy Moving Forward

Despite the challenges presented by MiCA, Tether remains committed to complying with evolving regulations while continuing to innovate. The company has acknowledged that MiCA introduces complexities for stablecoins licensed in the EU, particularly as the usage of stablecoins varies between regions. While USDT remains popular in emerging markets such as Asia and Latin America, the stablecoin market in Europe is relatively smaller in comparison.

Tether also praised European regulators for their efforts in establishing a clear and structured framework, which could help ensure long-term growth and stability in the cryptocurrency sector. The company stressed, however, that while MiCA presents new challenges, it could also provide a more secure environment for the cryptocurrency industry in the future.

"As Tether finalizes its European strategy for USDt, it remains committed to ensuring compliance with evolving regulations while introducing innovative technologies such as Hadron and investing in transformative projects like Quantor, designed to be MiCA-compliant," the spokesperson added.

The Road Ahead for MiCA and the European Crypto Market

The changes triggered by MiCA have already started reshaping the European crypto landscape. The European Securities and Markets Authority (ESMA) has urged crypto asset service providers (CASPs) to begin restricting non-MiCA-compliant stablecoins by the end of January 2025. Although exchanges are still allowed to list these tokens in "sell mode" until March 31, 2025, the regulator has signaled its intention to restrict non-compliant stablecoins completely by the end of Q1 2025.

As Europe adapts to MiCA regulations, the full impact on stablecoins like USDT remains to be seen. Tether's continued focus on compliance, while also pursuing technological innovation, suggests that the company aims to remain a key player in the European market while navigating the evolving regulatory landscape.