Binance plans to delist Tether’s USDT to EU-based customers to comply with MiCA. European users will still be able to withdraw assets until midnight on March 31.
Most major exchanges delisted USDT as soon as MiCA went through, but sell-only transactions are still grandfathered in until the end of Q1 2025. Circle may have a chance to consolidate its EU market share even further.
Binance Delists Tether Due to MiCA
MiCA, the EU’s comprehensive new stablecoin legislation, is finally getting Coinbase to meet more of its requirements. Before the rollout, the exchange engaged in some proactive compliance, limiting unregulated stablecoins for EU users.
However, MiCA took effect in December, and Binance is only now agreeing to delist Tether’s USDT.
“We are making changes to the availability of non-MiCA compliant Stablecoins in the EEA to comply with regulatory requirements. Impacted assets are USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC and PAXG. Binance will restrict the availability of Spot trading pairs with non-MiCA Compliant Stablecoins for EEA users,” the firm’s statement claimed.
Tether’s USDT is the world’s largest stablecoin, but MiCA requirements have caused it a lot of hassle. Most exchanges delisted the asset in December, causing a $2 billion drop in USDT’s market cap.
Binance, however, bucked the trend by still Tether products in the EU. It still allows users to sell their tokens, but that functionality is about to go away.
The announcement cites an EU guidance statement published in January. However, most of the prior delistings took place before the deadline, which is March 31st. Binance is pushing the clock as long as possible, and it will delist Tether’s USDT one minute before midnight on that day.
Although Tether claims that MiCA didn’t have a large long-term impact, the firm had made active preparations several months beforehand. At the moment, it’s unclear how much more pain this Binance delisting will cause Tether. If nothing else, it’s not a bullish development.
Meanwhile, it’s clear that Tether’s biggest competitor is set to take advantage of the EU market. Last July, Circle already predicted that its own stablecoin could take some of Tether’s EU market share after MiCA.
In December, it also made overt preparations to seize this new territory and compete with smaller stablecoin issuers like Ripple.
Ultimately, Binance’s delisting choice is another piece of bad news for Tether, which might be in an uncomfortable moment. Already, Coinbase announced it would delist USDT if the US government implemented MiCA-style stablecoin regulations.
The firm has consistently rejected an independent audit of its reserves, which would be an integral part of future compliance.
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