As the European Union’s Markets in Crypto-Assets (MiCA) regulation comes into full effect, major cryptocurrency exchanges are delisting Tether’s USDT stablecoin due to non-compliance. In response, Tether-backed companies Oobit and StablR have introduced MiCA-compliant stablecoins EURR and USDR, aiming to provide regulated alternatives for European users.
MiCA Regulation Prompts USDT Delistings
Under MiCA, stablecoin issuers must adhere to stringent requirements, including:
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Obtaining authorization as electronic money institutions (EMIs).
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Maintaining at least 60% of reserves in EU-based banks.
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Providing full transparency through regular audits and disclosures.
Tether has opted not to comply with these regulations, citing concerns over financial risks and privacy issues.Consequently, exchanges like Binance and Kraken have begun delisting USDT for European users to align with MiCA standards.
Introduction of MiCA-Compliant Stablecoins: EURR and USDR
To address the regulatory gap left by USDT’s delisting, Tether-affiliated companies Oobit and StablR have launched two new stablecoins:
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EURR: A euro-pegged stablecoin.
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USDR: A US dollar-pegged stablecoin.
Both stablecoins are fully backed by fiat reserves held in regulated European institutions and are issued on the Ethereum and Solana blockchains. StablR holds an EMI license from the Malta Financial Services Authority, ensuring compliance with MiCA requirements.
Integration with Oobit’s Payment Platform
Oobit, a fintech startup that received $25 million in funding led by Tether, has integrated EURR and USDR into its crypto payment platform. Users can now make payments using these stablecoins, with the added incentive of a 5% cashback on transactions.
Tether’s Strategic Shift in Europe
While Tether has withdrawn USDT from the European market due to MiCA non-compliance, it maintains an indirect presence through investments in MiCA-compliant projects like Oobit and StablR. This strategy allows Tether to continue serving European users within the new regulatory framework.
Broader Implications for the Stablecoin Market
The enforcement of MiCA has led to a reshaping of the stablecoin landscape in Europe. Other MiCA-compliant stablecoins, such as Circle’s EURC and USDC, are gaining traction as viable alternatives. The shift underscores the EU’s commitment to regulatory oversight in the crypto space and the necessity for stablecoin issuers to adapt accordingly.
As MiCA continues to influence the European crypto market, the success of EURR and USDR will serve as a benchmark for the viability of regulated stablecoins in the region.