{"id":20047,"date":"2024-12-31T10:46:11","date_gmt":"2024-12-31T08:46:11","guid":{"rendered":"https:\/\/forklog.com\/en\/usdt-market-capitalisation-declines-amid-mica-implementation\/"},"modified":"2024-12-31T10:46:11","modified_gmt":"2024-12-31T08:46:11","slug":"usdt-market-capitalisation-declines-amid-mica-implementation","status":"publish","type":"post","link":"https:\/\/forklog.com\/en\/usdt-market-capitalisation-declines-amid-mica-implementation\/","title":{"rendered":"USDT Market Capitalisation Declines Amid MiCA Implementation"},"content":{"rendered":"

On December 30, the EU’s MiCA regulation for digital assets came into effect. The market capitalisation of the leading stablecoin USDT declined<\/a> from over $141 billion in mid-month to approximately $137.5 billion.<\/p>\n

The new rules impose stringent requirements on stablecoin issuers, including licensing, reserve standards, and liquidity norms.<\/p>\n

Agne Linge from WeFi commented to The Block<\/a> that compliance with the regulation is economically burdensome for major companies in the sector, such as Tether, the diversified business behind USDT.<\/p>\n

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\u201cThe new EU law requires small stablecoin issuers to now hold 30% of their reserves in low-risk commercial banks within the EU, while for larger players like Tether, the threshold is set at 60% or more,\u201d she said.<\/p>\n<\/blockquote>\n

However, the expert does not anticipate significant financial consequences for the USDT issuer due to exiting the European Union. The company is expected to earn around $10 billion in profit by the end of the year, has substantial cash reserves, and diversifies its income through investments, Linge noted.<\/p>\n

She also highlighted that most EU countries provide a transition period of six to 18 months to adapt to the new rules.<\/p>\n

Amid regulatory uncertainty, some European crypto exchanges have taken precautionary measures. Coinbase Europe delisted USDT and five other stablecoins.<\/p>\n

In contrast, competitors like Binance and Crypto.com have not ceased supporting the assets. Both platforms chose to observe the implementation of MiCA and await clarifications regarding the new rules.<\/p>\n

Paybis’ Chief Revenue Officer Uldis Teraudkalns believes the law \u201cwill transform the EU crypto landscape with far-reaching consequences.\u201d He suggested that the need to comply with the requirements will drive some companies out of the union, regardless of their size.<\/p>\n

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\u201cThe main beneficiaries could be jurisdictions close to the EU, such as the UK and Switzerland. This will depend on how their regulatory regimes develop,\u201d Teraudkalns speculated.<\/p>\n<\/blockquote>\n

In his view, MiCA brings several advantages to the industry, such as improved investor protection and reduced fraud risks. However, this is associated with increased costs for conducting crypto-related business. This could lead to consolidation and reduced competition, the expert acknowledged.<\/p>\n

He assessed that the EU market remains attractive for industry companies, so internal migration to regions with a more lenient regulatory approach will occur.<\/p>\n

Back in August, Tether CEO Paolo Ardoino criticised MiCA, noting that the law creates a \u201csystemic risk\u201d not only for stablecoins but also for the banking system itself.<\/p>\n

In December, he supported the view that the regulation is a \u201chuge gift\u201d for traditional credit and financial institutions.<\/p>\n","protected":false},"excerpt":{"rendered":"

On December 30, the EU’s MiCA regulation for digital assets came into effect. The market capitalisation of the leading stablecoin USDT declined from over $141 billion in mid-month to approximately $137.5 billion. The new rules impose stringent requirements on stablecoin issuers, including licensing, reserve standards, and liquidity norms. Agne Linge from WeFi commented to The […]<\/p>\n","protected":false},"author":1,"featured_media":20046,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"select":"","news_style_id":"","cryptorium_level":"","_short_excerpt_text":"","creation_source":"","_metatest_mainpost_news_update":false,"footnotes":""},"categories":[3],"tags":[733,1483,36,807,1245],"class_list":["post-20047","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news-and-analysis","tag-europe","tag-mica","tag-regulation","tag-stablecoins","tag-tether-usdt"],"aioseo_notices":[],"amp_enabled":true,"views":"26","promo_type":"","layout_type":"","short_excerpt":"","is_update":"","_links":{"self":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/20047","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/comments?post=20047"}],"version-history":[{"count":0,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/posts\/20047\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media\/20046"}],"wp:attachment":[{"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/media?parent=20047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/categories?post=20047"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/forklog.com\/en\/wp-json\/wp\/v2\/tags?post=20047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}