- MiCA implementation begins today, December 30, 2024.
- Tether has no plans to acquire a MiCA license.
- USDT holders don’t need to panic over the new MiCA law.
Markets in Crypto-Assets Regulation (MiCA) implementation will begin tomorrow, December 30, 2024, marking a landmark in the EU crypto regulation environment. According to the conditions, the new framework aims to protect investors, regulate investors, and provide licenses for crypto service providers.
Most analysts consider MiCA a game-changer for the crypto industry in Europe and expect its implementation to stabilize the digital assets sector. One notable aspect of the new framework is that crypto asset service providers would now require licenses to operate in the EU region, not minding where they are based. In the meantime, service providers operating under national laws would benefit from a transition period, even though specific rules apply for stablecoins listed on their platforms.
Related: EU’s MiCA Regulations Push Tether’s USDT Off Major crypto exchanges
It is worth noting that individual entities are behind the issuing of stablecoins. Therefore, such companies must apply separately before their digital assets can be used in the EU. According to reports, this condition would impact the use of the USDT stablecoin, considering the issuing company, Tether, is not licensed to operate in the EU and does not have plans to acquire the MiCA license soon.
Nonetheless, there are talks about Tether finding a way around the situation by working on a MiCA-licenses Euro stablecoin. Doing that would allow the company to comply with EU regulations. Meanwhile, it is important to note that not having a MiCA license does not threaten USDT’s stability. Analysts believe one implication of the new rule is that USDC may see more adoption because of the current condition, since its issuer, Circle, is licensed in the EU.
Related: Coinbase Puts a Stop to USDC Yields in Europe: MiCA Isn’t Helping
It is crucial to note that there are no immediate risks in holding the USDT stablecoin arising from the current situation. USDT holders can keep their assets in their portfolios unless the crypto exchange decides to delist the cryptocurrency. Under such circumstances, the exchange will convert the USDT balance to a regulated stablecoin like the USDC and maintain a seamless operation.
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