In the past few weeks, there has been a lot of discussion about the introduction of the MICA regulatory framework in Europe and its effects on unlikely incompatible currencies such as Tether (USDT).
In this article, we see how and to what extent can the new European Union list be repercussions on the future of Tuhar?
The spoiler: There is not much to fear for fear at the present time.
All the details below.
The organizational framework imposes strict rules for stable currency exporters
On December 30, the MICA List (markets in encrypted assets) entered into force in Europe, which led to the creation of New systems for stable currency exporters.
The controversial European regulatory framework requires companies that manage its own electronic money to have specific licenses under the supervision of the European Banking Authority (EBA). From now on, only banks and financial brokers are able to trade the electronic money code (EMT) and the reference assets code (ART).
The legislation also sets the actual limits of those companies, such as Tether, which operates with major headquarters outside the euro area.
Mica requires that the source of the stable currencies keep The majority of their guarantees with a European credit institution.
For USDT, this is a big problem, since about 83 % of Tether reserves are present detained In US Treasury bonds and the equivalent of criticism.
The same CEO of the company expressed a little preparation for compliance with this demand, as this means exposing itself to an external bank.
In Europe, in fact, deposits are guaranteed by up to 100,000 euros thanks to the DGS (DGS) system, but the amount that Tether should put on the table is much larger.
Not to mention the fact that this approach can prefer to cancel a potential link, which seriously threatens the stability and reliability of USDT.
In fact, due to the lack of MICA list with Tether’s position, the stable USDT is likely to become illegal in Europe.
What are the effects of Mica on Tether USDT?
Due to the lack of compliance with the Tether USDT with the Mica List, many support the idea of this Current currency exchanges will remove stable currency.
However, at the present time, this thesis is inaccurate because the cryptocurrency is not removed from the list, except for Coinbase (which supports the Circle and USDC competitor in shareholders’ position).
Binance, which represents the largest exchange in the world in terms of trading volume, has limited support for USDT; It still allows trading, deposits and withdrawals.
Other leading stock exchanges in this sector such as Crypto.com, Bybit, Kaken, Bitget, HTX, Mexc and Kucoin have not been removed.
Therefore, the stock exchange platforms, at least at the present time, appear independently decided to continue to provide trading services denominated in the euro. USDT.
This is because the origin of Tether represents the most liquid and widespread currency in the entire sector, with a strong presence in many mass chains.
In the coming months, there will continue to be the possibility that European organizers will pressure encrypted currency brokers, forcing them to remove USDT from the stock exchanges.
However, so far we are only talking about media speculation, with no concrete thing that can justify the current FUD campaign against Tether.
The latter is also preparing for the potential impact by relying on the companies compatible with MICA, such as QuantoseTo issue a new legitimate currency in Europe.
Tether targets America and Asia after the imposition of Europe
Whether it is deleted from the list or not, for Tether, the presence of USDT in Europe and compliance with MICA does not seem central factors for the future of its business.
Already mentioned Bitblaze, The largest market share of Tether is currently in AsiaWhere the regulations are more convenient.
According to recent studies, Asia represents about 60-70 % of annual USDT sizes, with North America in second place with 15-20 %. Followed by Europe with 10-15% of the size and finally Africa by 5-10%.
Abandoning the European market means only losing a small part of its presence in the world Currency encryption sector.
Not to mention the fact that even in the scrap scenario in Europe, USDT will remain a circulation via DEX by users residing in the euro area.
Moreover, it should be noted how Tether recently decided to enhance its influence in America, given the difficult context of MICA.
Last week, CEO Paulo Erdino announced that he had obtained a license for the DASP service provider in El Salvador.
Thus, Tether has transferred its offices to Nayeb Bokili, friendly currencies, which Erdino described as “”The beacon of innovation in the field of digital assets“.
The goal of the encryption company is to expand the emerging markets in Central America by enhancing the culture of exchanges in stable currencies.
Usdt Leader Stable Currency Trading Size
Despite MICA’s organizational inhibitors, Tether still represents the source of the most dominant stable currency in the encrypted currency industry.
Since entering the new Usdt list into effect, its apostles have been almost the same, with a loss of only 0.37 % in dominating the entire market.
As of today, the value of the currency is a total of $ 133 billion, with A market share of 64.8% in the stable cryptocurrency sector.
Since last year, its apostles have increased by $ 45 billion, highlighting its success and strong attention by investors.
Moreover, according to the data on the series that has been reported by the Visa, it seems that Tether with USDT is leading unnecessarily the trading volumes in stable currencies for several years so far.
The currency is the most used in this type of transaction, with a very clear gap with the main competitor USDC (the stable currency compatible with MICA).
In particular, since April 2019 there has been no month in USDC trading sizes compared to USDT.
As of today, trading volumes are about twice the size of USDC and more than 300 times FDUSD size.