EU Approves Stablecoins, Excludes Tether; Crypto Market Reacts

The European Union (EU) has taken a significant step in regulating the cryptocurrency market by approving ten stablecoin issuers under the Markets in Crypto-Assets (MiCA) regulations. This move has sparked debate and concern, particularly due to the exclusion of Tether (USDT), the largest stablecoin by market capitalization.

The approved stablecoin issuers include Banking Circle, Circle, Crypto.Com, Fiat Republic, Membrane Finance, Quantoz Payments, Schuman Financial, Societe Generale, StabIR, and Stable Mint. These firms have issued a total of fifteen stablecoins, with ten pegged to the euro and five to the US dollar. The absence of Tether from this list has raised questions about the EU's regulatory priorities and the potential impact on the digital asset market.

In addition to stablecoin issuers, the EU has authorized 11 Crypto-Asset Service Providers (CASPs) across Germany, the Netherlands, and Malta. These providers offer services such as trading, exchange, execution, custody, and transfers within the EU's regulatory framework. The approval of these CASPs further solidifies the EU's commitment to creating a clear and stable environment for cryptocurrency activities.

Tether, despite its significant market capitalization, did not receive approval under MiCA regulations. As a result, crypto platforms have begun delisting USDT for EU-based users. Tether has expressed disappointment with the decision, describing the delistings as "hasty and unwarranted." However, MiCA's rules require stablecoin issuers to meet specific compliance standards, which may have contributed to Tether's exclusion.

Tether has been expanding its operations beyond the EU in response to growing regulatory restrictions. The stablecoin issuer recently proposed acquiring a 51% stake in a South African energy company, signaling a shift in focus toward investments outside of digital assets. Additionally, Tether has invested in the sports industry, recently partnering with Juventus to strengthen its presence in mainstream sectors. This move aligns with Tether's broader strategy of integrating digital assets, AI, and biotech into traditional industries.

Industry experts have raised concerns that the EU's strict regulations under MiCA could isolate the region's digital asset market. Natalia Łątka, Director of Public Policy and Regulatory Affairs at Merkle Science, suggested that the EU's regulatory stance may discourage foreign firms from operating