Tether grapples with new FUD as MiCA rules go into effect on December 30

Key Takeaways

The release of MiCA on December 30 raises uncertainty about Tether's compliance and its impact on the crypto market.
Coinbase has delisted USDT due to MiCA regulations while other exchanges await further guidance.

Tether's USDT stablemate faces more regulatory uncertainty as the European Union's Markets in Crypto Assets (MiCA) Regulation comes into effect on December 30.

The new framework imposes strict compliance requirements for stablecoins, raising questions about the operational status of USDT across the EU.

Amidst this uncertainty, many on crypto Twitter have been spreading FUD (fear, uncertainty, and doubt) about Tether, considering its compliance and future stability under the new rules.

Coinbase has already listed USDT in anticipation of the MiCA regulations, while major exchanges including Binance and Crypto.com continue to trade the stablecoin while they wait. to management guidance.

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

He said the main question remains whether all exchanges will list USDT at the same time or whether some will wait for further clarification from regulators.

Tether CEO Paolo Ardoino addressed market concerns on social media, suggesting that FUD around Tether is often supportive for the crypto market, while dismissing the campaign as a “poorly coordinated effort” by competitors.

Under MiCA, stablecoin issuers must obtain an e-money license and hold up to two-thirds of the reserves in independent banks. While Circle has obtained the necessary approval, Tether has not yet done so.

In a Bloomberg reportPascal St-Jean, CEO of crypto asset manager 3iQ Corp., highlighted the importance of Tether, saying that “a large portion of crypto assets trade in pairs against USDT Tether.”

He said switching to other stable or fiat pairs could create inefficiencies for investors.

The new MiCA rules could encourage the listing of the stablecoin on several European crypto exchanges, which could force traders to move away from USDT by exchanging it for USDC or EUR fiat .