Author: Brian McGleenon, The Block; Compiled by: White Water, Golden Finance

The European Union’s Crypto-Asset Market (MiCA) regulation came into full effect on Monday, marking a major shift in the way cryptocurrencies are regulated in the region. However, Tether, the world’s largest stablecoin, has yet to receive MiCA compliance certification. European regulators have remained silent on whether stablecoins meet new regulatory standards, creating uncertainty about USDT’s future in the EU’s single market.

According to data from CoinGecko, the global market value of USDT has declined in the past 10 days, from more than $141 billion on December 19 to more than $138 billion as of press time.

MiCA imposes strict regulatory requirements on stablecoin issuers within the EU, including reserve and liquidity requirements. Agne Linge, head of growth at WeFi, noted that meeting these requirements can be financially challenging for large stablecoin issuers like Tether.

Linge noted: “New EU law now requires small stablecoin issuers to keep 30% of their reserves in low-risk commercial banks within the EU, while larger players like Tether must keep 60% of their reserves. % or more of reserves are held in banks. “Given Tether’s massive capitalization and global adoption, it is not economically feasible to meet this demand without disrupting the broader crypto ecosystem.”

However, Linge It is believed that Tether’s huge market capitalization and global adoption make it unlikely to face direct financial consequences from a potential exit from the EU.

“Tether’s operations are largely insulated from potential regional disruptions,” Linge said. “The company is also highly profitable and on track to achieve $10 billion in profits by the end of the year.”< /p>

Linge added that thanks to its large cash reserves, Tether continues to diversify its products and investments, reducing the risks associated with stablecoin issuance.

Linge emphasized that Tether has used its large cash reserves to diversify its products and investments, thereby reducing the risks associated with stablecoin products. WeFi's head of growth further noted that most EU countries offer a transition period of 6 to 18 months for compliance or exit, which could help cushion the impact of sudden cancellations.

As regulatory uncertainty remains, some European exchanges have taken precautionary measures. Coinbase Europe listed USDT and five other stablecoins earlier this month, citing potential regulatory risks. The move comes in an effort to comply with MiCA requirements and highlights the growing pressure exchanges face to comply with the new regulatory framework.

In contrast, major exchanges such as Binance and Crypto.com continue to support USDT in Europe and are awaiting further clarity from regulators. Both companies said they intend to closely monitor MiCA’s execution before making any major changes to their stablecoin offerings.

Full implementation of MiCA will transform the EU’s cryptocurrency landscape, with profound consequences for companies of all sizes. Paybis chief revenue officer Uldis Teraudkalns highlighted MiCA’s impact on the EU’s internal cryptocurrency market, noting that it could push both smaller and larger companies out of the bloc due to significant compliance costs and investment requirements.

Teraudkalns said: “The new regulations will definitely give a boost to smaller, and even some larger, companies outside the EU, as they not only require compliance but also require companies to significantly increase investment to meet those requirements. “ The main beneficiaries are likely to be jurisdictions close to the EU, such as the UK and Switzerland, depending on how regulatory regimes develop there. ”

Teraudkalns highlighted the benefits of MiCA, including enhanced investor protection and reduced fraud. , money laundering and market manipulation risks. However, he also pointed to drawbacks, pointing to the increased costs of setting up and operating a crypto business, which could lead to market consolidation and less competition.

Despite these challenges, Teraudkalns stressed that access to the EU common market remains a significant advantage. Therefore, he noted that a shift within the EU towards more progressive and cost-effective jurisdictions is expected and already underway.

In addition to the EU’s MiCA regulations, individual member states are implementing complementary measures to manage cryptocurrencies. Italy, for example, has revealed plans to increase capital gains tax on crypto assets from 26% to 42%, bringing it more in line with the taxation of other investment income. The change highlights a broader shift toward recognizing cryptocurrencies as mainstream financial instruments subject to standard tax regulations.

The increase in tax rates is part of Italy’s broader fiscal strategy to fund commitments and reduce the deficit, signaling a shift toward taxing emerging assets such as cryptocurrencies as a major source of public revenue.

Paybis co-founder Konstantin Vasilenko comments on the changing tax landscape. "Cryptocurrency is no longer just a playground for tech enthusiasts."