The market capitalization of Tether's USDT, the largest dollar-pegged stablecoin, has experienced its most significant weekly decline in two years, sparking concerns about market volatility.
Key Market Developments
- **$1.1% weekly drop**: USDT's market cap fell to $137.24 billion (¥21.547 trillion at ¥157/$1) this week
- EU exchange delistings: Multiple European crypto exchanges and Coinbase discontinued USDT trading due to MiCA compliance concerns
- Limited market impact: Analysts suggest the effects will primarily be confined to the Eurozone
Understanding MiCA's Impact on Stablecoins
The Markets in Crypto-Assets (MiCA) regulation, which fully took effect on December 30, 2025, mandates that:
- Asset-referenced token (ART) issuers must obtain MiCA licenses
- Electronic money token (EMT) providers must comply with new regulatory standards
👉 Learn how MiCA is reshaping crypto regulation in Europe
While EU traders can still hold USDT in non-custodial wallets, centralized exchanges (CEXs) operating under MiCA can no longer facilitate USDT transactions.
Market Reactions and Analyst Perspectives
Orderly Network's Karen Tang observes:
"Even with MiCA restricting @Tether_to access in the EU, USDT's market dominance remains intact. The EU isn't the largest crypto market—most trading activity occurs in Asia and the United States."
Bitblaze's market analysis highlights:
"With $138.5B market cap and $44B daily trading volume, USDT maintains its position as the leading stablecoin. Since 80% of USDT trading volume originates from Asia, the EU delisting will have minimal impact."
Tether's Strategic Compliance Moves
Tether has proactively invested in MiCA-compliant companies:
- StablR (stablecoin solutions provider)
- Quantoz Payments (regulated payment services)
This demonstrates Tether's commitment to maintaining regulatory alignment while preserving market access.
FAQ: Understanding the USDT Market Shift
Q: Will USDT lose its market dominance after MiCA?
A: Analysts suggest no—Asia continues to drive most USDT trading volume.
Q: Can EU residents still use USDT?
A: Yes, but only through non-custodial wallets, not via regulated exchanges.
Q: How does MiCA affect other stablecoins?
A: All asset-referenced and electronic money tokens must comply with new licensing requirements.
Q: Why did Coinbase delist USDT in Europe?
A: Compliance with MiCA's stringent regulations for electronic money tokens.
👉 Stay updated on stablecoin market trends
Q: What percentage of USDT trading occurs in Europe?
A: Estimates suggest less than 20% of global USDT volume originates from EU markets.
Q: Has Tether taken steps to comply with MiCA?
A: Yes, through strategic investments in compliant European financial service providers.
Long-Term Market Outlook
While the immediate impact appears contained to European markets, this regulatory shift highlights:
- Increasing global fragmentation in crypto regulations
- The growing importance of jurisdictional compliance strategies
- Potential opportunities for MiCA-compliant stablecoin alternatives
The crypto market continues demonstrating resilience amid regulatory changes, with USDT maintaining its crucial role as liquidity gateway across most global markets outside Europe.