Why Tether doesn’t care much about MiCA compliance?

MiCA stands for Markets in Crypto-Assets is a new set of rules from the European Union that aims to regulate cryptocurrencies. Stablecoins like Tether’s USDT are one of its main targets.

To be allowed in the EU under MiCA, stablecoin issuers must get a license and must become fully approved as electronic money institutions. just like companies offering digital wallets or prepaid cards. This process is expensive and slow.

MiCA says that if you issue a major stablecoin like USDT, at least 60% of your reserves must be stored in EU banks. The goal is to make the system safer.

Issuers must regularly share reports on reserves, audits, and how they operate. They must also publish a white paper. This is more disclosure than many stablecoins are used to.

If a coin doesn’t meet MiCA rules, it can’t be traded on regulated EU exchanges. For example, Binance and Kraken have removed USDT pairs for European users.

You can still hold or send USDT in Europe, but you won’t be able to trade it on official platforms easily.

Tether has publicly explained why it won’t follow MiCA. CEO Paolo Ardoino and others believe the rules are flawed for several reasons:

First, the bank rule is risky and concentrated. Forcing stablecoin issuers to store most of their money in European banks could actually create more risk. If there’s a rush to withdraw funds and banks can’t handle it, both the banks and stablecoins could crash.

Instead, Tether keeps most of its reserves in U.S. Treasuries, which it sees as safer and easier to cash out.

Tether is worried that the EU’s plan for a central digital euro could hurt privacy. Ardoino says it could be used to monitor or control people’s spending. The European Central Bank says privacy is a priority, but Tether isn’t convinced.

Their Users Aren’t in the EU. Tether says most of its users are in places like Turkey, Nigeria, and Argentina. These countries have high inflation and weak banks.

MiCA would force Tether to focus more on Europe, but that’s not where their real demand is. So, they’d rather skip MiCA than change their priorities.

Turkey has one of the highest crypto usage rates in the world—around 16% of people use it to protect against inflation.

What happens when Tether ignores MiCA?

Tether’s decision is already affecting users and exchanges in Europe:

Exchanges are dropping USDT. Binance and Kraken removed USDT trading pairs in the EU to follow the law. Others are doing the same.

Europeans can still hold or move USDT, but trading it is harder. People are switching to coins like USDC and EURC, which follow MiCA rules.

With less USDT on exchanges, trading may become more volatile and less efficient.

Tether isn’t retreating. It’s expanding in other regions. Tether moved its headquarters to El Salvador, a country that supports crypto. The company got licensed and is investing there.

Tether’s pushback against MiCA highlights a bigger issue: crypto rules are different everywhere.

• Some places are strict (like the EU).
• Others are unclear (like the U.S.).
• Some welcome crypto (like El Salvador and Hong Kong).
• Others ban it outright (like China).

This creates a confusing world for companies and users. A coin might be legal in one country and banned in another. Companies are constantly shifting strategies and locations to keep up.

Tether isn’t just rejecting MiCA because it’s inconvenient. They believe crypto’s future will be built in places like Brazil, Nigeria, and El Salvador—not in Brussels.

Fun Fact: In 2024, Tether (USDT) had over $20 trillion in transactions—more than Bitcoin—and more than 400 million users globally.