Europe’s ban on Tether (USDT) is causing fears of a major crash in the cryptocurrency market. Known as the world’s largest stablecoin, USDT is seen as an ideal vehicle for cryptocurrency transactions with its value pegged to the dollar. However, will the same stablecoin cause a market-shaking crisis due to its non-compliance with European regulations?
Shock: This Cryptocurrency Has Been Banned! Will It Cause a Crypto Market Crash?
Tether is facing a major problem due to its failure to comply with the European Union’s Market in Crypto Assets (MiCA) regulations. According to MiCA standards, stablecoins must have an e-money license in order to be traded on exchanges. However, Tether failed to obtain this license and will be delisted from many exchanges in Europe on December 30, 2024.
The effects of this ban will be huge. USDT is the third largest crypto asset after Bitcoin and Ethereum. It also has a significant place with a market cap of $139.28 billion. In particular, the fact that USDT is the most widely held asset further increases the impact of this ban. Liquidity issues, combined with a decline in investor confidence, will cause a crypto market crash.
Tether: A Unifying Force or a Ticking Time Bomb That Holds the Crypto Market?
In addition to the Tether ban, analyst Jason noted that Tether has not minted any new tokens in the last two weeks. Jason described Tether as a unifier of the crypto market but also a ticking time bomb. He suggested that the ban and exchange crazy people would detonate this bomb. This situation is not new; Tether has faced bans in many jurisdictions in the past. However, it has maintained its dominance in the market. However, criticisms are closely following Tether. 
For example, Justin Bons called Tether a $118 billion scam. Another critic noted that Tether has never received approval from a major auditing firm. In contrast, Tether CEO Paolo Ardoino takes a confident stance against all the criticism. Paolo expressed that he sees these discussions as a positive signal for the token with his post “Tether FUD = rocket!”
Impact of Tether Ban on Crypto Investors
Investors in Europe will be the most affected by this ban. They will lose access to the crypto market’s largest stablecoin. Additionally, crypto exchanges will face liquidity issues. Outside of Europe, the effects of this ban will create a crash-like situation in the global crypto market.
While critics have pointed out Tether’s lack of regulatory compliance and oversight, CEO Ardoino claims that this negative news is a “ bullish signal ” for the token. However, it will be important for investors to monitor the effects of this ban.
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