Tether to end support for EURT stablecoin citing MiCA regulations, falling demand

2024-11-29 09:25:25 Primitive Reading

From theblock by James Hunt

Tether is set to discontinue support for its Euro stablecoin EURT +0.11% amid evolving regulations in the region and falling community interest.

In a statement on Wednesday, the stablecoin issuer urged customers holding EURT on all supported blockchains, including Ethereum, Solana and Tron, to redeem their assets by Nov. 27, 2025. New EURT issuance requests are no longer accepted, though the company confirmed that the last acquisition request was processed in 2022.

“This decision aligns with our broader strategic direction, considering the evolving regulatory frameworks surrounding stablecoins in the European market,” Tether stated. “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 firm said it would shift its focus to support new ventures, such as Quantoz Payments’ MiCA-compliant stablecoins, EURQ and USDQ, powered by Tether’s real-world asset tokenization platform, Hadron.

The impact of the EU’s MiCA regulations

The EU’s Markets in Crypto-Assets regulation (MiCA), overseen by the European Securities and Markets Authority, was approved by the European Parliament in April 2023, mandating that stablecoins issued in the region must pass increased regulatory requirements.

MiCA’s implementation rolls out in different phases, with an initial deadline last June primarily for crypto asset service providers and other entities operating in the crypto space to comply with certain stipulations set out in the regulation, including registration and KYC/AML requirements.

Other provisions, including some that apply to stablecoins, are being phased in over time, with full compliance for the most stringent requirements, such as capital and reserve obligations, coming into force by the end of December.

Stablecoin issuers operating outside the EU but providing services to EU residents will also need to comply with MiCA regulations, potentially leading to significant changes in their operational and compliance strategies globally.

Tether’s stablecoin dominance

Tether’s EURT once dominated the Euro stablecoin market, accounting for a market cap of more than $500 million at one point. However, since the implementation of select provisions of the new regulations in June, MiCA-compliant stablecoins, such as Stasis’ EURS, Circle’s EURC and Société Générale’s EURCV, have overtaken it in market share, representing a supply of $133 million, $91 million and $41 million, respectively. EURT has fallen to a supply of $27 million, according to CoinGecko data.

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