Tether's Market Cap Falls by 1% After Full Implementation of EU's MiCA, Potential Volatility Ahead

After the comprehensive regulation MiCA for virtual assets (cryptocurrencies) by the European Union (EU) was fully implemented on December 30, Tether (USDT), facing regulatory risks, has seen a decline in its market capitalization.

On the 2nd (local time), the cryptocurrency specialized media CoinDesk, citing TradingView data, reported that "USDT's market capitalization has fallen by more than 1% this week, currently recording $137.2 billion, marking the largest decline since the FTX incident in November 2022."

The decline in Tether's market capitalization occurred as several exchanges based in the EU delisted trading pairs for USDT, citing non-compliance with the MiCA regulations that came into full effect on December 30.

Users residing in the EU can still hold USDT in non-custodial wallets, but cannot trade it on centralized exchanges that comply with MiCA. Karen Tang, APAC Partnership Lead at Orderly Network, explained, "These concerns may be unfounded claims, and the negative impact will be limited to the Eurozone. Most cryptocurrency trading occurs in Asia and North America."