MiCA vs USDT: European Regulation Poses Challenges for Tether in the European Union

MiCA vs USDT: European Regulation Poses Challenges for Tether in the European Union





June 6, 2025 — New European Union legislation, known as MiCA (Markets in Crypto-Assets Regulation), is reshaping the regulatory landscape for crypto assets in the region — and one of the world’s most popular stablecoins, USDT (Tether), is in the spotlight.

MiCA, passed in 2023 and set to come into full effect in 2025, establishes strict rules for stablecoin issuers and crypto asset service providers that wish to operate legally in the European economic area. Key points of the regulation include **reserve, transparency, audit and prior authorization** requirements by European authorities.

Direct Impact on USDT
Tether, the issuer of USDT, has not yet fully complied with MiCA requirements, which raises questions about the continued circulation of USDT on exchanges operating under EU jurisdictions. Under the new regulation, stablecoins pegged to fiat currencies (such as the US dollar, in the case of USDT) must present more robust guarantees and operate under the supervision of financial entities licensed in Europe.

In recent statements, regulatory authorities in Germany and France have already indicated that they may restrict the use of non-compliant stablecoins, citing risks to financial stability and consumer protection.

Alternatives on the Rise
With the possible limitation of USDT, other stablecoins that follow MiCA standards — such as EURC (Circle) and EURe (Stasis) — may gain ground among investors and exchange platforms. Circle, for example, has already obtained a license as an Electronic Money Institution (EMI) in the EU, making its stablecoins a safer and more compliant option with the new legislation.

Market Reactions
Exchanges have already announced plans to adjust to continue operating within MiCA rules. This includes selectively listing approved stablecoins and potentially phasing out non-compliant tokens, such as USDT, for European users.

European investors should be aware that while USDT will remain available in markets outside the EU, its use within the bloc may be restricted or even temporarily disabled on some platforms.

In summary
MiCA marks a new era for the crypto market in Europe, establishing clear rules and aiming for greater security and stability. For companies like Tether, the challenge lies in adapting to a more demanding regulatory environment — or risk losing a presence in one of the world’s largest markets.