Will Europe ban Tether ($USDT)?

By Taaza Facts

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Will Europe ban Tether ($USDT)?

With Europe’s comprehensive MiCA regulations coming into effect at the end of this year, it is looking likely that these regulations will not allow Tether to operate in this jurisdiction. What could this mean for Europe and crypto?

Tether’s reducing market share

Tether is the foremost USD stablecoin in the world, and in Q1 of this year it made record profits of $4.52 billion. However, its market share is slowly reducing, and has descended to around 69%. At the same time, Circle’s USDC, a regulated alternative to USDT, has seen its market share increase to 11%.

One major reason why the use of Tether’s USDT stablecoin might be seeing reduced market share is the impending coming into force of the Europe-wide MiCA regulations on digital assets.

Furthermore, in anticipation of these impending regulations, certain exchanges, such as OKX, have already delisted USDT pairings in the European economic area. Kraken is another major exchange which is considering a similar move.

Could Europe find itself isolated from crypto?

With potentially no more competition from the huge number one stablecoin in Europe, it is perhaps hoped that euro stablecoins will come more to the fore. The euro is of course the native currency of Europe, and as such it would surely be the preferred option.

However, with that said, across the globe, USD stablecoins have always dominated, and other currencies have struggled to get any sort of a toe in the door. If the market goes with this move, all may be well. But if this regulatory shift has the effect of leaving the continent in its own backwater as the world moves in a different direction, Europe could find itself isolated.

An anti-crypto sentiment pervades European banks

It could well be argued, at least as far as the European banking industry and financial agencies are concerned, that there is an overwhelming anti-crypto sentiment that pervades these traditional monetary institutions.

Christine Lagarde, President of the European Central Bank, has made it known that she believes that cryptocurrencies are “worth nothing”. With such a view, and her undoubted influence on regulatory policy, Lagarde perhaps believes that crypto can be eradicated, or at least heavily suppressed in Europe.

A CBDC is needed to enforce citizens’ compliance 

Also, while she champions the introduction of a Central Bank Digital Currency (CBDC) in the Eurozone, competition from the peoples’ cryptocurrencies such as Bitcoin, would not be desirable.

Finally, it might be asked, just how much will a euro be deemed to be worth, as the European central bank starts adding to its first recent rate cut? Much, much more currency will need to be printed in the Eurozone in order to be able to roll over the debt. 

Of course, this will come at the expense of every European citizen as their currency is further debased. Lagarde is perhaps hoping that the imposition of a CBDC will speed this process up and prevent citizens from seeking the safe harbours of gold, silver, or Bitcoin.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

Taaza Facts

I am a multifaceted content creator with expertise in blogging, Finance, and Cryptocurrency reviews. My creative journey involves weaving captivating stories in blogs, designing aesthetically pleasing and functional websites, and dissecting the nuances of cinema. We are dedicated to sharing our passion and insights with a global audience.

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