Binance Delists Tether's USDT in EU Compliance with MiCA

Binance, the world's largest cryptocurrency exchange, has announced that it will delist Tether's USDT and several other stablecoins from its European platform. The move is in compliance with the European Union's new stablecoin legislation, known as MiCA. European users will still be able to withdraw their assets until midnight on March 31.

Most major exchanges, including Coinbase, have already delisted USDT in response to MiCA. However, sell-only transactions are still grandfathered in until the end of Q1 2025. Circle, the issuer of USDC, may have an opportunity to further consolidate its market share in the EU.

Binance's decision to delist Tether's USDT comes after the exchange engaged in proactive compliance measures, limiting unregulated stablecoins for EU users before MiCA went into effect. However, the exchange is only now agreeing to delist Tether's USDT, which is the world's largest stablecoin.

In a statement, Binance said, "We are making changes to the availability of non-MiCA compliant Stablecoins in the EEA to comply with regulatory requirements. Impacted assets are USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC, and PAXG. Binance will restrict the availability of Spot trading pairs with non-MiCA Compliant Stablecoins for EEA users."

Tether's USDT has faced challenges due to MiCA requirements, with most exchanges delisting the asset in December. This delisting caused a $2 billion drop in USDT's market cap. Binance, however, continued to offer Tether products in the EU, allowing users to sell their tokens. This functionality will now be removed.

The announcement cites an EU guidance statement published in January. However, most prior delistings took place before the March 31 deadline. Binance is pushing the clock as long as possible, delisting Tether's USDT one minute before midnight on March 31.

Tether claims that MiCA has not had a large long-term impact, but the firm had made active preparations several months beforehand. It is unclear how much more pain Binance's delisting will cause Tether. However, it is not a bullish development for the stablecoin issuer.