Will MiCA Cripple Tether? Experts Disagree, Lean “No”
Now that MiCA has taken effect in the EU, cryptocurrency experts are divided on the impact this may have on Tether. USDT’s market value has fallen sharply, but concerns about Tether’s collapse may be exaggerated.
Several influential analysts, including Tether’s CEO, have publicly stated that this FUD may be intended to trigger panic selling and therefore provide a cheap buying opportunity for cynical investors.
Tether’s USDT reacts to MiCA
Crypto Asset Market (MiCA) Regulation has come into effect in the EU, and the community is particularly eager to know how it will affect Tether. When the deadline is December 30, USDT market value drops by US$2 billion.
In fact, this was USDT’s biggest drop since 2017. FTX crashes,when Stablecoin It fell more than 5% in the second week of November 2022. So, soon after, some users saw this as a sign of a bear market. Influential analyst Michael van de Poppe point out “The market could collapse.”
To be fair, MiCA has caused some difficulties for Tether, Focus on stablecoins. Coin library Start limiting USDT Mid-December, but EU soon Instruct all exchanges to delist it.
Furthermore, some competitors clearly believe that MiCA Opportunity to monopolize new market share. The market value of Tether’s largest competitor, Circle’s USDC, also surged by more than $1 billion on the deadline. However, not everyone shares this pessimistic view:
“There is a lot of misinformation about USDT being considered illegal in the EU. First of all, holding USDT in the EU will not be illegal. (2) 80% of USDT trading volume comes from Asia, and EU delisting will not have a serious impact. This starts from USDT’s This can be seen in the market capitalization’s decline of just 1.2%.” claim Axel Bitbretz.
Bitblaze subsequently compared this MiCA panic to several other USDT incidents, concluding that this FUD only creates “buying opportunities” for savvy investors.
Tether CEO Paolo Ardoino agree Based on this assessment, supporters are advised: “Don’t believe FUD. Competitors are just trying to make you believe things that don’t exist.”
In addition, Tether is also deliberately preparing for the entry into force of MiCA. In November, the company Stopping its EURT stablecoinciting issues with future MiCA compliance.
However, it subsequently invested resources in other EU operations to maintain revenue streams for the foreseeable future. tether Invest in compliant stablecoinsjust to give one example.
“USDt is not the only stablecoin in the consortium that is not available to the public. There are many other stablecoins whose issuers are not required to be authorized under MiCA – just because someone is not authorized under a specific law does not mean they do not comply with it Law. If a strong (and incorrect) approach is taken and CASPs are only allowed to trade stablecoins authorized by issuers under MiCA, it will seriously harm the liquidity of the EU market.” release Cryptocurrency lawyer Jonathan Galea, Ardoino retweeted the tweet.
In essence, MiCA will limit exchanges’ ability to offer stablecoins, but it will not condemn Tether itself. The company will likely never meet MiCA compliance, which will require USDT reserves to be held in EU banks.
The bottom line is that European markets are not strong enough to warrant such drastic action, especially when Asia accounts for the majority of USDT trading.
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