As a seasoned researcher with years of experience navigating the complex world of cryptocurrencies and regulations, I find myself intrigued by the ongoing saga of Tether’s USDt stablecoin in the European Union (EU). The recent decision by Coinbase to delist USDT seems to have left a trail of uncertainty for other exchanges operating within the EU.
In the coming days, the European Union’s rules for cryptocurrencies will be fully enforced, yet there remains a considerable level of ambiguity concerning Tether’s USDt stablecoin.
In mid-December, the U.S.-based cryptocurrency exchange, Coinbase, removed Tether’s USDT (USDt), stating it was adhering to the European Union’s regulations for markets in crypto-assets, known as MiCA.
As a researcher, I’ve observed that despite Coinbase’s decision to delist USDT in the U.S., this stablecoin remains active in the European Union. Several exchanges seem to be in a holding pattern, eagerly awaiting further guidance from European authorities regarding USDT’s compliance with MiCA, in hopes of clarifying their own regulatory obligations.
EU regulatory bodies have yet to determine if USDt adheres to the guidelines set forth by MiCA, but it’s important to note that this does not automatically imply that the stablecoin is considered non-compliant within European territories, as stated by a representative from the MiCA Crypto Alliance.
USDt’s fate in Europe: All eyes on MiCA deadline
Juan Ignacio Ibañez, a member of the Technical Committee of the MiCA Crypto Alliance, noted to CryptoMoon that while no regulators have explicitly declared USDT as non-compliant, this does not automatically imply that it is in compliance.
Regarding platforms such as Binance and Crypto.com persisting with USDT trading, Ibañez stated that there is no need for cryptocurrency exchanges to remove USDT from their systems at the same time as Coinbase, as there are no compelling reasons for this action.
He stated that Coinbase’s action could be an anticipatory move to dodge potential compliance issues or uncertainties in regulations at the eleventh hour, essentially taking extra caution.
By December 30th, when the MiCA regulation is fully implemented, it seems probable that Tether (USDT) will be removed from exchanges operating within the EU, as per Ibañez’s observations. Furthermore, he also mentioned that this could potentially occur.
“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.”
Ibañez commented that the “wait-and-see” method seems less effective compared to other MiCA requirements, potentially carrying excessive regulatory risk, implying a cautious approach might be more advisable.
Conflicting reports on USDT delistings in the EU
Although some outlets such as Bloomberg suggested that European cryptocurrency platforms should remove Tether’s USDt by December 30th, no such directive has been issued by European regulatory bodies at the time of this writing.
In October 2024, the European Securities and Markets Authority (ESMA), an important overseer for MiCA regulations, chose not to disclose to CryptoMoon whether USDT was classified as a restricted stablecoin according to the MiCA framework.
A representative from ESMA stated that they were collaborating with market players and relevant parties to tackle problems associated with stablecoins as outlined in the MiCA regulations.
cryptoMoon reached out to ESMA seeking their perspective on the classification of USDt within MiCA, however, no comment was given before the article’s release.
It has been discovered that as of December 27th, several European-based crypto exchanges such as Binance EU and Crypto.com are still facilitating USDT trades. However, these platforms have yet to reveal any plans regarding a potential delisting of USDT within the European Union in the near term.
MiCA’s transitional phase ends in July 2026
After December 30, 2024, the active implementation phase of MiCA concludes, but it’s important to note that there’s an additional 18-month transition period within the overall 36-month MiCA plan.
Based on data from ESMA, European Union member countries can choose to enact “temporary adjustments” that would let businesses currently offering cryptocurrency services under local laws continue these operations during the transition period of MiCA regulations.
Under the transitional measures of MiCA, ESMA discussed the concept known as “grandfathering.” This clause permits entities that were offering crypto asset services in compliance with their respective national laws before December 30, 2024, to carry on providing these services until July 1, 2026. However, this exemption ends once they receive or are denied a MiCA authorization.
Another method of transition involves streamlining the approval process for entities who were previously authorized by national laws as of December 30 to offer crypto asset services, according to the statement.
In the interim period, various types of regulatory systems might simultaneously exist among member countries, leading to differing degrees of consumer protection when it comes to using cryptocurrency services, as pointed out by ESMA.
Under MiCA, individual member states and countries within the European Economic Area have been given the discretion to determine their own grandfathering periods by the regulatory body. As stated in the provided document, a total of 10 member states, including France and Estonia, will be granted an 18-month period for this purpose.
In addition to eight other European Union countries including Austria, Greece, and Spain, there will be a twelve-month adjustment phase. Six additional nations, such as the Netherlands, will experience a six-month grace period.
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2024-12-27 14:23