As the European Union’s (EU) Markets in Crypto-Assets Regulation (MiCA) is set to take full effect on December 30, 2024, there remains significant uncertainty surrounding Tether’s USDt stablecoin. The regulatory framework, which aims to provide a comprehensive and harmonized approach to cryptocurrency regulations within the EU, has sparked various reactions from exchanges, regulators, and market participants.
Coinbase Delists USDT: A Proactive Approach or Regulatory Uncertainty?
In mid-December 2024, United States-based crypto exchange Coinbase delisted Tether’s USDt (USDT) due to compliance with the EU’s MiCA regulations. However, this move has not led to a uniform response from other exchanges operating in the EU.
Binance and Crypto.com Continue USDT Trading: A ‘Wait-and-See’ Approach?
Contrary to Coinbase’s decision, several European exchanges, including Binance and Crypto.com, continue to support USDT trading. According to Juan Ignacio Ibañez, a member of the Technical Committee of the MiCA Crypto Alliance, this approach can be seen as a "wait-and-see" strategy.
No Explicit Statement on Non-Compliance from Regulators
Regulators have not explicitly stated whether USDt is compliant with MiCA. However, this does not necessarily mean that USDT is considered non-compliant in the EU. Ibañez emphasized:
"No regulators have explicitly stated that USDT isn’t compliant, but this does not mean that it is."
USDT’s Fate in Europe: All Eyes on MiCA Deadline
As the MiCA deadline approaches, exchanges are facing a decision on whether to delist USDT or continue trading. Ibañez noted:
"We should look at the Dec. 30 date. The question is whether all exchanges will delist USDT at once, whether it will be progressive or whether some will play a ‘wait-and-see’ game expecting statements from the regulators."
Conflicting Reports on USDT Delistings in the EU
Some publications have reported that European crypto exchanges must delist Tether’s USDt by December 30. However, there is no explicit guidance from regulators on this matter.
MiCA Transitional Phase Ends in July 2026: What Does This Mean?
The MiCA regulation has a total timeline of 36 months, with the implementation phase ending on December 30, 2024. The transitional phase will last for 18 months, until July 1, 2026.
What is Grandfathering and Simplified Authorization Procedure in MiCA?
During the transitional period, grandfathering and simplified authorization procedures will allow entities already providing crypto asset services under national applicable laws to continue doing so. These measures aim to ensure a smooth transition for market participants.
MiCA’s Transitional Measures: A Mix of Regimes Will Coexist
The MiCA regulation allows EU member states to implement transitional measures, including the grandfathering clause and simplified authorization procedure. However, this may result in disparate levels of protection for consumers of crypto-asset services across member states.
List of Grandfathering Periods Decided by Member States Under MiCA
According to ESMA, 10 member states and European Economic Area countries will have an 18-month grandfathering period, while eight other jurisdictions will have a 12-month transition period. Six more jurisdictions will have a six-month grandfathering period.
Conclusion: Uncertainty Surrounds Tether’s USDt Stablecoin
As the MiCA deadline approaches, uncertainty remains surrounding Tether’s USDt stablecoin. Exchanges are facing a decision on whether to delist USDT or continue trading, while regulators and market participants await clarity on the regulatory framework. The MiCA regulation aims to provide a comprehensive approach to cryptocurrency regulations within the EU, but its implementation will likely be gradual and nuanced.
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