MiCA and its Impact on the Cryptofinancial Ecosystem: The Case of Tether under the Regulatory Lens

• Tether avoids licenses, prioritizing Asia, while USDC seeks approvals to dominate Europe by 2025.
• OKX and Uphold eliminate USDT in the EU, complying with MiCA limits, affecting cryptoasset liquidity.

The entry into force of the Markets in Cryptoassets Regulation (MiCA) on December 30, 2024, has marked a transformative milestone for the cryptofinance sector. This regulatory framework, designed to harmonize rules in the European Union (EU) on the issuance, public offering and admission to trading of cryptoassets, including stablecoins and other tokens, is generating significant ripples in the market.

Among the most debated implications, MiCA’s relationship with Tether (USDT), the most widely used stablecoin globally, has captured the attention of cryptofinancial analysts and exchanges in 2025.

MiCA establishes a strict regime for cryptoasset issuers and service providers, particularly stablecoins, which must comply with authorization, transparency and oversight requirements to operate legally in the EU.

Under Article 143 of the regulation, entities already offering cryptoasset services under national laws have a transition period until July 1, 2026 to align with the new standards, but reference stablecoins (such as USDT) face immediate challenges due to issuance limits and licensing requirements as e-money tokens.

A recent analysis published in January 2025 by cryptofinancial analyst Bitblaze, shared on platforms such as X, highlights that Tether has opted not to seek an e-money license or partner with MiCA-compliant European banks, citing “unfair regulations.”

This reflects Tether’s strategy of prioritizing markets outside the EU, especially in Asia, where regulations are more permissive.

Bitblaze stressed in its tweet:

“Tether’s largest market is in Asia; MiCA does not significantly affect its business in 2025, but could limit its presence in Europe.”

Tether’s decision has triggered reactions in the cryptofinancial ecosystem. Exchanges such as OKX and Uphold have clamped down on MiCA compliance. In March 2024, OKX announced the removal of USDT trading pairs in the EU, although it maintained support for other stablecoins such as USDC and euro-based pairs.

Uphold, meanwhile, discontinued support for USDT in 2024, along with other stablecoins such as Dai (DAI) and Frax Protocol (FRAX), conforming to MiCA restrictions on unauthorized stablecoins. These moves illustrate how MiCA is forcing platforms to reconfigure their digital asset offerings to avoid regulatory penalties.

However, uncertainty persists. An ETHNews analysttweet in March 2025 noted:

“MiCA imposes issuance limits on stablecoins; USDT exceeds €200 million and 1 million daily transactions, but its metrics are confusing, leaving exchanges in regulatory limbo.”

This point highlights a key challenge: the lack of clarity in how transaction and total value thresholds are measured under MiCA, which creates dilemmas for issuers and exchanges operating with USDT in Europe.

On the other hand, competitors such as Circle (USDC) are taking a different approach. Circle has announced in 2025 that it is in the process of applying for authorization under MiCA, positioning itself as a stablecoin aligned with European regulations.

This contrast highlights the strategic bifurcation in the stablecoin market: while Tether opts to dodge European regulations, other players are looking to capitalize on the regulatory clarity that MiCA offers, potentially gaining ground in the EU.

Cryptofinancial analysts also warn about the long-term implications. In a March 2025 Twitter thread, the ETHNewsexpert argued that MiCA could fragment the stablecoin market, relegating USDT to unregulated markets while elevating USDC as a leader in Europe.

Despite these tensions, some observers believe MiCA’s impact on Tether will be limited in the short term.

As Bitblaze noted in another January 2025 tweet:

“Tether will continue to dominate outside the EU; MiCA is a European hindrance, but does not threaten its global hegemony in 2025.”

EU Regulator Clarifies Rules for Non-Compliant Stablecoins as Exchanges Adjust Services

The European Securities and Markets Authority (ESMA) confirmed on March 4, 2025, that cryptocurrency exchanges and service providers in the European Union (EU) may continue offering custody and transfer services for stablecoins that do not comply with the Markets in Crypto-Assets Regulation (MiCA).

This clarification comes amid recent actions by exchanges like Binance to delist certain stablecoins for users in the European Economic Area (EEA).

Key Details of ESMA’s Guidance

In a statement to Cointelegraph, an ESMA spokesperson clarified that Titles III and IV of MiCA-which regulate public offerings and trading of crypto assets-do not explicitly prohibit holding or transferring non-compliant stablecoins. The agency emphasized that such services do not constitute offering tokens to the public or listing them for trading.

However, ESMA advised crypto service providers to restrict features that enable users to acquire non-compliant stablecoins, such as buy orders or automated trading pairs. Providers may allow users to sell or withdraw these assets until March 31, 2025, to facilitate exiting positions.

Exchanges Respond to MiCA Requirements

On March 3, 2025, Binance announced plans to delist nine stablecoins, including Tether (USDT), for EEA users by March 31. While trading pairs will be removed, the exchange confirmed it will still support deposits and withdrawals of these tokens. Other platforms, such as Uphold, have similarly discontinued support for non-compliant stablecoins like Dai (DAI) and Frax Protocol (FRAX).

Juan Ignacio Ibañez, a member of the MiCA Crypto Alliance’s Technical Committee, noted that debates persist over how MiCA’s rules apply to high-volume stablecoins like USDT, which exceeds the regulation’s daily transaction threshold of €200 million.

Unresolved Gaps in MiCA’s Framework

ESMA’s guidance has not fully resolved confusion around MiCA’s implementation. The regulation currently lacks specific rules for emerging sectors, including tokenized assets (e.g., real estate or commodities), cryptocurrency staking, and decentralized finance (DeFi) platforms. To date, only 10 stablecoin issuers-none of which include Tether-have secured MiCA authorization.

ESMA stated it is collaborating with national regulators to monitor compliance and ensure a “smooth transition” to the MiCA framework. The agency did not specify how it will measure transaction volumes or enforce penalties for violations after the March 31 deadline.

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