As from next month, the European Union’s new regulations will force some digital currencies to exit the European cryptocurrency market. This move will affect the dynamics of cryptocurrency trading in Europe.

Stablecoins are cryptocurrencies that offer price stability which are cryptocurrencies pegged to stable assets. Tether (USDT), which is tied to the dollar, stands out as the most widely used stablecoin. However, the new EU regulations will negatively impact Tether trading in Europe.

Insights into the New Regulations

The European Union’s new capital and transparency mandates will result in the exclusion of numerous stablecoins. Tether, with 70% of its $160 billion valuation at stake, falls short of the MiCA (Markets in Crypto-Assets) Regulation’s criteria.

Following this development, Tether is set to exit the EU market and has already been delisted from some Exchanges. While Tether USDT) is still trading on Kraken, the Exchange is contemplating delisting it.

Analysts believe the exit of Tether from Europe  will force investors to transition to alternative stablecoins and crypto beyond Europe’s borders. Steno Research cautions that this transition could unsettle market liquidity and stability. 

The CEO of Tether expresses skepticism about reaching an agreement with the European Banking Authority. Currently, only a handful of stablecoins conform to the EU’s new standards. Major exchanges like Binance, the largest globally, are counting on Circle’s USDC to bridge the void.

Tether’s Firm Stance

Circle’s USDC, which ranks as the second-largest dollar-backed stablecoin, could capitalize on this opportunity. Circle also provides a lesser-known stablecoin pegged to the euro, named EURC. Despite this, Tether has resolved to refrain from further attempts to align with European regulations.

In a definitive stance, Tether has chosen not to pursue compliance with European rules. Paolo Ardoino, Tether’s CEO, previously remarked that Europe’s disinterest is evident, given that the regulations drastically restrict crypto accessibility within the EU.

The post Unstable Times: What the Stablecoin Crackdown Means for Crypto appeared first on Crypto News Land.

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