Tether Skips MiCA Over Stablecoin Risks

Ardoino Calls MiCA Rules a Threat to Stablecoin Stability

Tether CEO Paolo Ardoino has confirmed that the company did not apply for a license under the European Union's Markets in Crypto-Assets (MiCA) regulation, describing the framework as dangerous for the stablecoin industry. His remarks come as MiCA's transitional period officially closed on July 1, 2026, forcing all unlicensed crypto firms to stop serving EU clients.

At the center of Ardoino's objection is a reserve requirement that applies to large stablecoin issuers. Under MiCA, significant stablecoin issuers must hold at least 60% of their reserves as deposits at European credit institutions. Ardoino argues this structure is inherently fragile. He has warned that forcing stablecoin issuers to rely so heavily on traditional banks could destabilize the broader system: if a wave of redemptions hits and those banks lack sufficient liquidity, the result could be a banking crisis and a stablecoin collapse happening at the same time.

Instead, Tether holds the majority of its reserves in US Treasuries, assets it regards as liquid, low-risk, and straightforward to redeem quickly. Tether's reserve composition holds approximately 80% of reserves in short-dated US Treasuries, with cash deposits closer to 5% of total reserves. Restructuring that model to meet MiCA's deposit rules would require a significant operational overhaul that Tether's leadership says would undermine its core mission.

400 Million Users Cited as Reason to Stay Outside EU Framework

Ardoino framed the decision as one driven by the interests of Tether's global user base rather than a rejection of regulation outright. "I decided to not apply to the MiCA license because I need to protect the 400 million+ users that we have around the world," he said, adding: "They are not as lucky as Europeans."

The practical consequences for European users have been swift. Coinbase removed $USDT for EEA users in December 2024, Crypto.com halted it for EU users in January 2025, Binance delisted USDT and other non-compliant stablecoins from EEA spot markets in March 2025, and Kraken halted EEA spot trading for USDT in the same month.

The gap left by $USDT has largely been filled by Circle's $USDC. Circle secured an Electronic Money Institution license in France, which passports across all 27 EU member states, making USDC and EURC the primary dollar options for licensed EU platforms.

Tether has not entirely stepped away from Europe. Companies including StablR and Oobit have launched MiCA-compliant tokens built on Tether's Hadron tokenization platform, allowing the company to maintain technology partnerships without issuing a MiCA-approved stablecoin itself. Meanwhile, the broader regulatory divide between jurisdictions continues to widen. The US GENIUS Act and the EU's MiCA both demand full 1:1 backing, yet they disagree on what counts as a reserve, and a single asset pool cannot satisfy both.

Sources:
Finextra: The Future of Stablecoins in Europe
Crypto.news: Tether Abandons Europe as MiCA Ban Wipes USDT from Exchanges
ESMA: Markets in Crypto-Assets Regulation (MiCA)