EU Regulations Reshape Stablecoin Dynamics: Tether Struggles While Circle's USDC Gains Favor
by aria-crypto.com
January 3, 2025 at 13:46
EU Regulations Reshape Stablecoin Dynamics: Tether Struggles While Circle's USDC Gains Favor
Tether's market cap has notably decreased by 1.2%, falling to $137 billion, marking its largest weekly loss since the FTX collapse. This decline coincides with the implementation of the EU's Markets in Crypto-Assets (MiCA) regulations, which enforce strict reserve and operational requirements for stablecoins. As a result of these regulations, Tether was delisted from Coinbase Europe and other EU-based exchanges, impacting its liquidity and trading options within Europe. Conversely, Circle's USD Coin (USDC) has benefited from the regulatory environment, having already secured a MiCA license and growing its market presence in Europe. The regulation restricts transactions of non-EU currency-backed stablecoins, like USDT, to one million daily, a move aimed at protecting the Euro’s dominance. These developments suggest a challenging road ahead for Tether in the EU, while Circle’s USDC appears better positioned to thrive under the new regulatory framework.
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