Tether, the prominent stablecoin issuer, is discontinuing EURT because of the EU’s MiCA regulations. Nonetheless, the firm invested in other MiCA-compliant stablecoins and maintains revenue streams from the European market.
Several competitors have regarded MiCA as an opportunity to disrupt Tether’s EU stablecoin dominance, and the firm has conceded some of this contest.
Tether Reacts to MiCA
This morning, the prominent stablecoin Tether announced via social media that it would discontinue EURT, its Euro-backed asset. The company explained its decision via a blog post, adding that the firm had stopped minting the asset, and current holders would have one year to redeem EURT tokens.
“This decision aligns with our broader strategic direction, considering the evolving regulatory frameworks surrounding stablecoins in the European market. Until a more risk-averse framework is in place — one that fosters innovation and offers the stability and protection our users deserve — we have chosen to prioritize other initiatives,” the post claimed.
In other words, Tether chose this path for one clear reason: the impending Markets in Crypto Assets (MiCA) law in the European Union. MiCA will transform crypto regulations in the EU, and it will particularly rearrange stablecoin dynamics. Earlier in September, multiple large companies openly considered MiCA an opportunity to disrupt Tether’s European presence.
Competitors have already begun entering the EU market with MiCA-compliant stablecoins; the first of which launched in September. Schuman Financial, a company founded by former Binance EU executives, released its own asset yesterday. Other crypto sectors are also taking advantage of MiCA, with Revolut X expanding European trade operations earlier this month.
Still, although Tether has conceded part of this market, the death of EURT does not signal the end of Tether’s interests. The announcement was quite clear that Tether was a major investor in a MiCA-compliant stablecoin from Quantoz. Tether also promoted Hadron, its new solution designed to support issuers in creating and managing stablecoins.
In short, Tether is engaging in a calculated retreat from the European market, not an outright surrender. The company is maintaining several revenue streams in MiCA-compliant stablecoins and may reenter the space at a later date. For now, the company has considerable resources to address this problem.
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