Tether argues that the regulation is deeply flawed, citing financial risks, privacy concerns, and more.

Does Tether Comply with MiCA?
The EU’s newly enacted Markets in Crypto-Assets Regulation (MiCA) represents the first major attempt by a global economic power to establish clear regional rules for the crypto sector, with stablecoins as a key focus.

For stablecoins to be traded in the EU, issuers must adhere to strict requirements:

1. Licensing is mandatory
   To issue a stablecoin in Europe, you must be a fully authorized Electronic Money Institution (EMI). This is the same license required for traditional fintech companies offering e-wallets or prepaid cards—a costly and lengthy process.

2. Most reserves must be held in European banks
   One of MiCA’s most contentious rules mandates that at least 60% of a stablecoin’s reserves be deposited in EU banks. The logic is to safeguard financial system stability.

3. Forced reserve transparency
   MiCA requires detailed periodic disclosures. Issuers must publish whitepapers and provide updates on reserves, audits, and operational changes.

4. Non-compliant tokens will be delisted
   Tokens failing to meet the rules cannot trade on regulated EU platforms. For instance, Binance has already delisted USDT trading pairs for users in the European Economic Area (EEA). Other exchanges are following suit.

The European Securities and Markets Authority (ESMA) clarified that EU citizens can still hold or transfer USDT but cannot offer it to the public or list it on official platforms. In other words, you may keep USDT in your wallet, but regulated exchanges won’t support trading it.

Why Tether Rejects MiCA
Tether’s leadership, including CEO Paolo Ardoino, has articulated why they refuse to engage with MiCA, citing critical flaws in financial risks, privacy, and the core audience for stablecoins.

1. Banking rules could backfire
   Ardoino warns that forcing stablecoin issuers to park 60% of reserves in European banks could create new vulnerabilities. If a wave of redemptions hits and banks lack liquidity, both the banking system and stablecoins could collapse simultaneously.

   Tether prefers holding most reserves in U.S. Treasuries—liquid, low-risk assets that are easier to redeem quickly when needed.

2. Distrust in the digital euro
   Tether questions the EU’s direction, particularly regarding the digital euro. Ardoino has criticized its potential for surveillance, arguing that centrally controlled digital currencies could track spending or restrict transactions for dissenters.

   Privacy advocates share these concerns. While the European Central Bank insists privacy is a priority (e.g., offline payments), Tether sees delegating such financial power to a single institution as risky.

3. Tether’s users aren’t in Brussels—they’re in Brazil, Turkey, and Nigeria
   Tether views itself as a lifeline for people in countries battling inflation, unstable banking systems, and limited dollar access. In Turkey, Argentina, and Nigeria, USDT is often more useful than local currencies.

   MiCA’s licensing and reserve requirements would force Tether to divert resources to meet EU-specific standards—a move it refuses to make at the expense of markets it believes need USDT the most.

   "Turkey has one of the highest crypto adoption rates globally, with 16% of its population engaged in crypto. This surge stems from the lira’s depreciation and economic instability, driving demand for stablecoins."

What Happens If Tether Ignores MiCA?
Tether’s defiance hasn’t gone unnoticed, with tangible impacts on EU exchanges and users:

1. Exchanges are dropping USDT
   Giants like Binance and Kraken have already delisted USDT pairs for EEA users. Binance removed them in March 2025; Kraken followed, also axing non-compliant stablecoins like EURT and PayPal’s PYUSD.

2. Fewer choices for users
   Europeans holding USDT can still withdraw or swap it on some platforms but can’t trade it on major exchanges. Many are shifting to MiCA-compliant alternatives like USDC and EURC.

   Even crypto payment gateways in Europe are dropping USDT support, further limiting options.

3. Liquidity could suffer
   Delisting USDT may increase market volatility, with wider spreads and sharper price swings. While some traders will adapt, others may struggle.

   "Tether (USDT) is the most traded crypto globally, surpassing Bitcoin with $20.6 trillion in 2024 volume and over 400 million users."

Tether’s Post-MiCA Strategy
While clashing with the EU, Tether is doubling down elsewhere:

• New HQ in El Salvador: After securing a digital asset license, Tether relocated to the crypto-friendly nation.

• AI investments: Through Tether Evo, it backs firms like Northern Data Group and launched Tether AI, a decentralized, open-source platform.

• Real-world projects: Investments in agtech (Adecoagro) and renewable energy align with its broader resilience goals.

• Media ambitions: Signs suggest Tether is eyeing content and communications beyond crypto.

Tether vs. MiCA Highlights Global Regulatory Chaos
Tether’s exit underscores a larger issue: the difficulty of building a cohesive business in a fragmented regulatory landscape.

• Regulatory arbitrage: Tether, like many crypto firms, shops for friendly jurisdictions (e.g., El Salvador over the EU). This raises questions: Do rules work if companies can easily bypass them? Does this protect users or confuse them?

• Global patchwork: The EU demands compliance; the U.S. sends mixed signals; Asia is split (Hong Kong embraces crypto; China doesn’t). Latin America leans into crypto for financial access.

For companies, it’s a mess—building for one market often means excluding others. For users, access hinges on local policies, creating uneven opportunities worldwide.

Note: Paragraphs are structured for clarity, with bolded subheadings as requested. The translation preserves the original tone and technical details while adapting idioms for natural English readability.

Tether argues that the regulation is deeply flawed, citing financial risks, privacy concerns, and more.

Does Tether Comply with MiCA?
The EU’s newly enacted Markets in Crypto-Assets Regulation (MiCA) represents the first major attempt by a global economic power to establish clear regional rules for the crypto sector, with stablecoins as a key focus.

For stablecoins to be traded in the EU, issuers must adhere to strict requirements:

1. Licensing is mandatory
   To issue a stablecoin in Europe, you must be a fully authorized Electronic Money Institution (EMI). This is the same license required for traditional fintech companies offering e-wallets or prepaid cards—a costly and lengthy process.

2. Most reserves must be held in European banks
   One of MiCA’s most contentious rules mandates that at least 60% of a stablecoin’s reserves be deposited in EU banks. The logic is to safeguard financial system stability.

3. Forced reserve transparency
   MiCA requires detailed periodic disclosures. Issuers must publish whitepapers and provide updates on reserves, audits, and operational changes.

4. Non-compliant tokens will be delisted
   Tokens failing to meet the rules cannot trade on regulated EU platforms. For instance, Binance has already delisted USDT trading pairs for users in the European Economic Area (EEA). Other exchanges are following suit.

The European Securities and Markets Authority (ESMA) clarified that EU citizens can still hold or transfer USDT but cannot offer it to the public or list it on official platforms. In other words, you may keep USDT in your wallet, but regulated exchanges won’t support trading it.

Why Tether Rejects MiCA
Tether’s leadership, including CEO Paolo Ardoino, has articulated why they refuse to engage with MiCA, citing critical flaws in financial risks, privacy, and the core audience for stablecoins.

1. Banking rules could backfire
   Ardoino warns that forcing stablecoin issuers to park 60% of reserves in European banks could create new vulnerabilities. If a wave of redemptions hits and banks lack liquidity, both the banking system and stablecoins could collapse simultaneously.

   Tether prefers holding most reserves in U.S. Treasuries—liquid, low-risk assets that are easier to redeem quickly when needed.

2. Distrust in the digital euro
   Tether questions the EU’s direction, particularly regarding the digital euro. Ardoino has criticized its potential for surveillance, arguing that centrally controlled digital currencies could track spending or restrict transactions for dissenters.

   Privacy advocates share these concerns. While the European Central Bank insists privacy is a priority (e.g., offline payments), Tether sees delegating such financial power to a single institution as risky.

3. Tether’s users aren’t in Brussels—they’re in Brazil, Turkey, and Nigeria
   Tether views itself as a lifeline for people in countries battling inflation, unstable banking systems, and limited dollar access. In Turkey, Argentina, and Nigeria, USDT is often more useful than local currencies.

   MiCA’s licensing and reserve requirements would force Tether to divert resources to meet EU-specific standards—a move it refuses to make at the expense of markets it believes need USDT the most.

   "Turkey has one of the highest crypto adoption rates globally, with 16% of its population engaged in crypto. This surge stems from the lira’s depreciation and economic instability, driving demand for stablecoins."

What Happens If Tether Ignores MiCA?
Tether’s defiance hasn’t gone unnoticed, with tangible impacts on EU exchanges and users:

1. Exchanges are dropping USDT
   Giants like Binance and Kraken have already delisted USDT pairs for EEA users. Binance removed them in March 2025; Kraken followed, also axing non-compliant stablecoins like EURT and PayPal’s PYUSD.

2. Fewer choices for users
   Europeans holding USDT can still withdraw or swap it on some platforms but can’t trade it on major exchanges. Many are shifting to MiCA-compliant alternatives like USDC and EURC.

   Even crypto payment gateways in Europe are dropping USDT support, further limiting options.

3. Liquidity could suffer
   Delisting USDT may increase market volatility, with wider spreads and sharper price swings. While some traders will adapt, others may struggle.

   "Tether (USDT) is the most traded crypto globally, surpassing Bitcoin with $20.6 trillion in 2024 volume and over 400 million users."

Tether’s Post-MiCA Strategy
While clashing with the EU, Tether is doubling down elsewhere:

• New HQ in El Salvador: After securing a digital asset license, Tether relocated to the crypto-friendly nation.

• AI investments: Through Tether Evo, it backs firms like Northern Data Group and launched Tether AI, a decentralized, open-source platform.

• Real-world projects: Investments in agtech (Adecoagro) and renewable energy align with its broader resilience goals.

• Media ambitions: Signs suggest Tether is eyeing content and communications beyond crypto.

Tether vs. MiCA Highlights Global Regulatory Chaos
Tether’s exit underscores a larger issue: the difficulty of building a cohesive business in a fragmented regulatory landscape.

• Regulatory arbitrage: Tether, like many crypto firms, shops for friendly jurisdictions (e.g., El Salvador over the EU). This raises questions: Do rules work if companies can easily bypass them? Does this protect users or confuse them?

• Global patchwork: The EU demands compliance; the U.S. sends mixed signals; Asia is split (Hong Kong embraces crypto; China doesn’t). Latin America leans into crypto for financial access.

For companies, it’s a mess—building for one market often means excluding others. For users, access hinges on local policies, creating uneven opportunities worldwide.

Note: Paragraphs are structured for clarity, with bolded subheadings as requested. The translation preserves the original tone and technical details while adapting idioms for natural English readability.