Tether
Tether was in the spotlight earlier this year after a report that billions in USDT passed through a sanctioned crypto exchange. Tether Website/Screenshot

KEY POINTS

  • Tether was trending on X as crypto users discussed the future of $USDT in the European Union
  • $USDC, $PYUSD, and $RLUSD were trading higher than $USDT Sunday amid the buzz
  • Coinbase became the first crypto exchange to confirm it was delisting $USDT upon MiCA's implementation
  • Tether's Paolo Ardoino said talks around $USDT's future were just FUD as 'pushed by competitors'

Tether, the company behind the world's largest stablecoin, is suffering an intense bout with FUD (fear, uncertainty and doubt) as the European Union's stringent Markets in Crypto-Assets (MiCA) regulation is set to go into full force Monday.

Tether's USDT stablecoin seems to have been affected significantly by FUD talks around the cryptocurrency community, dropping as low as $0.9954 late Sunday.

Tether price late Dec 29 2024]]
$USDT price late Dec. 29, 2024 IBTimes US

To compare the extent of FUD damage on USDT, it is best to look at the prices of top rivals, including USDC, which was trading at around $0.9998 late Sunday, and PayPal USD (PYUSD), another rising rival to USDT, was trading at the same price as USDC.

Ripple's RLUSD, a very new contender in the stablecoin circle, was trading at a higher price than USDT over the weekend and settled at around $0.9996 late Sunday.

RLUSD price late Dec 29 2024
Ripple's $RLUSD price late Dec. 29, 2024 IBTimes US

EU's MiCA Hits Tether's Pain Point

Even before the European Union announced its sweeping MiCA regulation, there were already concerns about Tether's compliance with crypto guidelines and whether it had enough reserves to back its U.S. dollar-pegged stablecoin.

However, concerns intensified earlier this year, when Consumers Research ran a billboard in Times Square, New York City, accusing the stablecoin behemoth of "corruption."

"We're sounding the alarm on the threat so-called 'stablecoin' @Tether_to poses to consumers and their suspicious business practices. Tether thrives in the shadows, refusing to be audited and constantly dodging fraud investigations," the consumer protection advocacy group wrote in a statement at the time.

Questions about Tether's compliance with MiCA regulations further hit the spotlight after crypto exchange giant Coinbase announced it will delist USDT, the unchallenged stablecoin market leader.

Coinbase told its users that "due to the new European Markets in Crypto-Assets (MiCA) regulation, Coinbase will implement restrictions for stablecoin services that do not meet MiCA requirements" at the end of the month.

Following the announcement that ultimately put a dent on Tether's stablecoin dominance, a spokesperson told Decrypt that the company was "finalizing its long-term plans for the region, where it remains committed."

Notably, USDC and EUR Coin (EURC) are compliant with MiCA standards and thus will continue to be supported in the bloc, Coinbase clarified.

Crypto Users Offer Mixed Reactions to Fears Around $USDT's Future

Tether and USDT were top business and finance trends on X over the weekend after certain posts circulated regarding supposed plans of other digital asset exchanges to delist USDT in the EU Monday.

In some of the posts, it was shown that another crypto exchange giant, Binance, is purportedly "blocking European users from receiving USDT."

Samson Mow, a prominent figure in crypto and tech, said no other exchanges have announced they are delisting USDT so far. He also posted a screenshot of the grace period that some EU member states have set for MiCA compliance.

Notably, crypto exchange OKX already announced that it was delisting some USDT pairs, including REN/USDT.

Tether has around six months left to comply with MiCA rules, at least in some jurisdictions, but with other member states, the stablecoin issuer has more time to comply.

For some crypto observers and experts, USDT's delisting and price crash will hit Bitcoin hard. Bitcoin is the main foundation of the crypto market, and if it gets hit by a USDT collapse, it may be doomed to crash as well, as projected by @DeFi_Hanzo.

Tether Asks Community to Cool Down

Amid continuing fears and discussions around crypto exchanges in the EU potentially delisting USDT Monday, Tether CEO Paolo Ardoino had sharp words for the stablecoin's "competitors."

"A poorly coordinated campaign, pushed by competitors. It won't work as it never worked," he wrote on X over the weekend.

At least one user asked for Ardoino's thoughts on whether "USDT will actually be removed from European exchanges" once MiCA comes into full force. "This is a disservice for us and not FUD, don't you agree?" the user asked. Ardoino has yet to respond.