Crypto Industry Divided Over MiCA Regulations as Tether Delistings Continue
The European Union’s Markets in Crypto-Assets (MiCA) regulations have triggered significant shifts in the cryptocurrency industry, particularly for stablecoins. As the new rules come into effect, some exchanges have begun delisting Tether’s USDT, sparking debates over the regulation’s long-term impact. While critics argue that the move could disrupt liquidity and market stability, others believe MiCA will ultimately benefit both stablecoin issuers and users.
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USDT Delisting Raises Concerns Over Market Stability
As MiCA’s stablecoin regulations take full effect, major exchanges have started adjusting their compliance strategies. Crypto.com recently became the latest exchange to remove USDT from its Eurozone platforms, citing MiCA regulatory requirements. This follows a statement from the European Securities and Markets Authority (ESMA), which urged EU-based exchanges to restrict non-compliant crypto assets.
While ESMA acknowledges that excluding USDT could disrupt crypto markets, its January 17 statement gave cryptocurrency platforms until the end of Q1 2025 to fully comply. Coinbase and Crypto.com, both of which have received MiCA licenses, are among the major exchanges that have delisted USDT—the world’s largest stablecoin by market capitalization.
Critics argue that MiCA’s approach to asset-referenced tokens (ARTs) and electronic money tokens (EMTs) could pose risks to market liquidity. Tether CEO Paolo Ardoino has warned that removing USDT from European exchanges might increase systemic risks for the banking sector and digital assets alike. Others fear that traders could be forced to rely on alternative stablecoins, which may lead to greater market fragmentation and inefficiencies in cross-border transactions.
MiCA’s Potential Benefits for Crypto Innovation
Despite concerns, some industry experts believe that MiCA’s regulatory framework provides significant benefits. One notable feature is the introduction of a “passporting” system, which allows crypto businesses to operate seamlessly across EU member states with a single regulatory approval.
Marina Markezic, co-founder and executive director of the European Crypto Initiative, highlights MiCA’s transformative potential:
“Despite challenges, MiCA creates a great opportunity for crypto businesses to operate more efficiently across European markets. This single registration approach significantly reduces barriers for blockchain and crypto projects to offer services across the EU.”
This approach aims to streamline market entry for new projects while ensuring compliance with European financial laws.
Comparisons to Switzerland’s Crypto-Friendly Model
Proponents of MiCA often compare it to Switzerland’s “technology-neutral” regulatory framework, which has helped establish the country as a global hub for cryptocurrency innovation. The Swiss model is seen as accommodating new technologies without stifling growth, attracting numerous blockchain companies to its ecosystem.
However, Andreas Glarner, a Web3 legal expert and partner at Swiss law firm MME, questions whether MiCA can replicate Switzerland’s success. He argues that MiCA’s compliance burden may limit EU-based crypto firms from expanding globally:
“As MiCA regulation is designed as an EU market access regulation, with a high compliance burden (and costs), we are very skeptical that the framework will allow EU/EEA companies to target the global market in an efficient manner.”
Glarner suggests that Switzerland’s business-friendly policies and established financial ecosystem will continue to give it a competitive edge over the EU.
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Balancing Compliance and Innovation
As crypto companies navigate the evolving regulatory landscape, some are prioritizing compliance to ensure long-term stability. Ivan Bjelajac, CEO of Apex Fusion Foundation, emphasizes the importance of building trust and transparency within regulatory frameworks:
“At Apex, we believe the future of blockchain lies in trust, transparency, and accessibility. That’s why we are committed to being compliant by design from the very start. By creating a neutral blockchain that supports compliance, we empower projects and businesses that wish to operate within regulatory frameworks to build confidently on our platform.”
Bjelajac believes that a compliance-first approach can foster innovation while maintaining regulatory integrity.
Conclusion: MiCA’s Impact on the Crypto Market
The implementation of MiCA regulations has sparked mixed reactions across the cryptocurrency industry. While the delisting of USDT raises concerns about liquidity and market stability, supporters argue that the regulatory clarity provided by MiCA will ultimately strengthen the European crypto ecosystem.
The coming months will be crucial in determining whether MiCA’s framework will promote growth or create unintended market disruptions. As exchanges, issuers, and regulators continue to adapt, the long-term effects of MiCA on the crypto industry remain to be seen.
