EU Crypto Rules Spark Stablecoin Shift: Tether Loses Ground to Rivals

The European Union's Markets in Crypto-Assets (MiCA) regulation is reshaping the stablecoin landscape, with Tether's USDT experiencing a significant decline in market share as exchanges comply with the new rules. USDT's dominance in the stablecoin market dropped to 59.9% in October 2025 from 70% a year earlier, a shift driven by MiCA's requirement for exchanges to delist non-compliant tokens like USDT, according to a CoinCentral report. Tether's total supply, however, has nearly doubled to $180.9 billion during the same period, underscoring strong global demand outside the EU. Analysts note that while USDT's share has fallen, the token's growth is outpaced by competitors such as Circle's USDC and Ethena's USDe, which have gained traction in the post-MiCA environment; the report also highlights these dynamics.

To maintain a presence in Europe, Tether has pivoted to strategic investments in MiCA-compliant firms, including Malta-based StablR and Dutch firm Quantoz. These entities issue euro-denominated tokens that align with regulatory standards, allowing Tether to retain a foothold in the EU without altering USDT itself, the CoinCentral piece adds. Meanwhile, Coinbase, the crypto exchange, has expanded its private market capabilities by acquiring investment platform Echo for €323 million, enabling early-stage crypto firms to conduct self-hosted public token sales and raise funds for projects, with over €173 million already secured through the platform, according to a Lux Times article. Coinbase's move follows its acquisition of a MiCA license in Luxembourg, highlighting the growing importance of regulatory alignment in the sector.

Beyond the EU, regulatory incentives are also influencing the industry. In June 2024, the U.S. enacted the Clean Technology Manufacturing Investment Tax Credit (CTM-ITC), which could benefit firms like XXIX, a mining company whose Preliminary Economic Assessment (PEA) outlines potential development for its Opemiska project. While the PEA relies on speculative inferred mineral resources and forward-looking statements, the CTM-ITC offers a framework for tax advantages that could support its growth, according to a TradingView report. Such regulatory shifts underscore the broader challenge for crypto firms: navigating a rapidly evolving compliance landscape while maintaining competitive edge.

As stablecoins and crypto platforms adapt to stricter rules, regulators face mounting pressure to balance innovation with oversight. Tether's ecosystem, for instance, plans to launch USAT, a U.S.-regulated stablecoin aligned with the GENIUS Act, to tap into institutional markets. Similarly, traditional finance players like Stripe and Visa are developing regulated fiat-backed tokens, intensifying competition, the CoinCentral analysis notes. The outcome of these dynamics will likely determine whether crypto remains a disruptive force or becomes fully integrated into conventional financial systems.