USD stablecoin Tether saw its biggest decline since the FTX collapse during a slow cryptocurrency market period in 2022.

On-chain data showed that the Tether stablecoin (USDT) lost approximately 1.2% of its market value this week as EU digital asset regulations came into full effect on December 30.

The coin's market capitalization has fallen to $137 billion from its December peak of $140 billion, sparking speculation about Tether's future and potential USDT volatility. Concerns have arisen that the USDT operator may exit the EU now that new laws have been introduced.

However, social media sentiment has been countered by industry leaders and observers who have pointed to data confirming USDT's resilience outside the EU.

Nothing burger

Experts and analysts have dismissed rumors that EU markets regulating crypto assets would disrupt USDT's business. Karen Tang, Head of APAC Partnerships at Orderly Network, and Social Media Analyst Axel Bitblaze, male The Asian and US markets maintain USDT dominance.

About 80% of USDT trading volume occurs in Asia, according to Bitblaze. MiCA regulations are likely to hamper the EU itself, slowing the growth of digital assets due to “overly complex regulation,” Tang said.

Tether charts MiCA compliance

Speculation about USDT's future in the EU intensified in late 2024 after Coinbase and several EU-based exchanges. It has been deleted USDT, citing MiCA compliance concerns. While the stablecoin rules came into effect in July, the full MiCA framework came into force at the end of the year.

MiCA requires stablecoin operators to obtain certain licenses for e-money tokens and trading asset tokens, such as USDT. So far the circuit (US dollars) is the first and only major source of stablecoins gets For MiCA license.

pregnancy invested In EU-based companies such as StablR and Quantoz to prepare for regulatory listing. CEO Paolo Ardoino confirmed that the company has no intention of abandoning the European Union. Although USDT cannot currently be traded on MiCA-compliant exchanges, traders can still store the stablecoin in non-custodial wallets as a temporary solution.