Stablecoin giant Tether ditches Euro-linked MiCAR, expressing disapproval.
In a significant move, Tether, the issuer of the world's largest stablecoin, has announced the shutdown of its Euro stablecoin, EURT. The decision comes as a result of Tether's unwillingness to comply with the MiCAR regulations, European regulations for stablecoins, due to the significant adjustments or licensing required in the EU.
The MiCAR regulations, which are designed to ensure stability and transparency in the stablecoin market, require a substantial proportion of reserves to be held in bank accounts. However, Tether has expressed reservations about this requirement, stating that it operates offshore and is not planning to become MiCAR compliant.
Other stablecoin issuers have also expressed reservations about the MiCAR regulations, pointing to the potential burdens they impose.
EURT, with a market capitalization of €26 million, and Tether's USD stablecoin, with a market capitalization of $132 billion, will give their users a year to redeem their coins. This means that users will have until a specific date in the future to convert their EURT or USDT holdings into another form of currency or asset.
The shutdown of EURT is a significant development in the stablecoin market, highlighting the challenges that regulatory compliance can present for companies operating in this space. As the stablecoin market continues to grow, it is likely that we will see more instances of companies having to make tough decisions about whether to comply with regulations or exit the market.
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