Tether’s market capitalization will slide as MiCA regulations come into play.

Tether's market capitalization has slipped 1.5% over the past seven days as broader MiCA regulations on crypto asset service providers kick off in the Eurozone on December 30. These regulations include some strict rules for global stablecoin providers as some European exchanges have started delisting USDT.

Leading stablecoin Tether (USDT) has lost 1.5% of its market capitalization over the past seven days, falling from $139.46Bn to $137.32Bn after the introduction of broader MiCa regulations on December 30.

As per the regulation, European exchanges have started delisting USDT from their crypto lineup, directly contributing to USDT's falling market share and capitalization.

MiCA buys around stablecoins

The Market Regulation in Crypto Assets (MiCA) was approved in June 2024, but a broader regulatory framework for crypto asset service providers was introduced on December 30.

Under the new framework, dollar-denominated stablecoins such as USDT and USDC are encouraged to use euro-pegged stablecoins for settlements and transactions to limit their dominance in the EU.

While dollar-denominated stablecoins are not actually banned (users can hold them in a decentralized wallet), they are subject to strict rules (such as holding 30% reserves in traditional banks, which can affect cash flow) and are limited to registered exchanges. European Union

Comments from industry insiders are still lacking as USDT is uncapped as most USDT trading and transactions come from Asia and the US.

Meanwhile, Tether CEO Paolo Arduino retweeted a post noting that Tether's daily trading volume as of December 31 was 14x that of the second largest stablecoin.

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— Paolo Ardoino 🤖🍐 (@paoloardoino) December 31, 2024