MICA Officially Entered into Force, Tether Experienced the Biggest Drop in the Last Two Years! Will the Decline Continue?

It was first announced by the European Union in 2020 and passed by the European Parliament in 2023. Crypto Asset Act (MICA) It came into force on December 30.

largest stablecoin USDTWhile it remains unclear whether or not it complies with MICA regulations. Tether‘s market value fell by over 1 percent.

At this point Tether FTX It suffered its biggest weekly decline since the crash.

Some of these in the European Union on Tether crypto para with stock exchanges CoinbaseIt comes after ‘s decision to delist USDT due to the EU’s MiCA law.

According to the MICA regulation, companies issuing stablecoins must have a MiCA license and meet certain conditions in order to be publicly traded within the EU. Therefore, EU-based investors will be able to continue holding USDT in non-custodial wallets, but will not be able to trade on MICA-compliant central exchanges.

Due to the key importance of USDT in the crypto market, this decline has led to increased speculation of a broader market downturn. However, analysts stated that this decline in Tether may be limited to Europe only.

Orderly Network’s APAC president Karen Tang stated that MICA regulation will not harm USDT’s market dominance.

“MiCA regulations are not expected to harm USDT’s market dominance.

Because the largest volume of USDT occurs in Asia and the USA.

“These regulations slow down the EU’s digital asset innovation, which is already slow due to complex over-regulation.”

Cryptocurrency analyst Bitblaze stated that most of Tether’s volume occurs in Asia, and that due to MiCA, the delisting decision of Coinbase and European exchanges will have a very limited impact on Tether.

“USDT is the largest stablecoin with a market cap of $138.5 billion and a daily trading volume of $44 billion.

As of today, 80% of USDT’s trading volume comes from Asia, so delisting in the EU will not have a serious impact on its market dominance.”

*This is not investment advice.