As a seasoned crypto investor with a decade of experience navigating this ever-evolving market, I can’t help but feel a sense of deja vu as I watch the EU’s latest regulatory moves unfold. The delisting of Tether (USDT) from European exchanges feels like a familiar dance between regulation and innovation, one that seems to forget the very purpose of these regulations – to foster a healthy, competitive, and secure environment for all participants.
It seems that Tether has been impacted by regulatory changes in Europe, specifically the EU’s new Markets in Crypto-Assets (MiCA) regulations. These regulations, set to be fully implemented across member states by the end of this year, are significantly altering the crypto market landscape.
To enhance supervision and stamp out unlawful activities, MiCA mandates that companies authorized as e-money issuers handle stablecoins traded on centralized platforms when dealing with those in the European Union. In response to this regulation, numerous crypto exchanges within the EU have decided to stop listing Tether’s USDT, the world’s leading stablecoin.
This development has fed fears about liquidity and investor appeal due to the USDT delisting.
Tether Delisted: Implications For EU Crypto Markets
As a crypto investor, I can’t overlook the significance of Tether (USDT) within our digital economy. It serves as a reliable instrument for trading and settling cryptocurrency transactions due to its stablecoin nature, providing a crucial link in the intricate web that is the crypto ecosystem.
Restricting use of Tether throughout the continent might lead to unintended consequences, such as driving traders toward jurisdictions perceived as less important or compelling them to engage in trades with less liquid pairings instead.
Usman Ahmad, the CEO of Zodia Markets, emphasized that the decision would have a substantial effect on their EU clients, labeling it as both “exclusive” and “disruptive” in nature. According to Usman, this move could prove challenging for their European clientele.
From a certain perspective, I can see the reasoning behind the action; however, it appears quite exclusive and restrictive towards European clients, as US Dollar Tether (USDT) stands out significantly as the most liquid stablecoin available.
As a crypto investor, I’ve observed that the recent delisting of Tether (USDT) from European exchanges has led to significant changes in my trading habits. Following this move, there seems to be a noticeable shift towards more fiat trading pairs, as reported by Bloomberg. This could be due to the reduced number of USDT trading pairs available, prompting traders like myself to adapt and explore other options within the market.
Erald Ghoos, the CEO of OKX Europe, pointed out that as an alternative to Tether, traditional currencies are becoming more common in trades, signifying a shift in market trends.
Europe Falling Behind In The Crypto Race?
Although the aim of MiCA is to fortify regulatory standards, critics have pointed out that it may actually impair the EU’s competitiveness as a crypto hub. Pascal St-Jean, CEO of crypto asset manager 3iQ Corp said:
A significant number of cryptocurrencies are traded in pairs with Tether’s USDT. Therefore, if an investor wants to purchase the same asset paired with another stablecoin, they would need to exit the USDT pair first, which could lead to market disruptions due to the costs involved.
According to Bloomberg’s report, these restrictions are being implemented as other areas, particularly North America, are witnessing increased cryptocurrency activity. Data from PitchBook indicates that venture capital investment in European crypto startups is predicted to hit a four-year low in 2024, which only adds to the region’s troubles.
Currently, it appears that the United States is leaning towards a more welcoming stance on cryptocurrencies. The incoming administration of President-elect Donald Trump seems to be appointing advocates who support cryptocurrencies to important roles, suggesting a possible lenient regulatory approach.
Featured image created with DALL-E, Chart from TradingView
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2024-12-21 13:12