Binance Will Remove USDT for European Customers

In a move to comply with the EU's Market in Crypto-Assets (MiCA) regulations, Binance is set to discontinue Tether’s USDT for its customers in Europe by March 31.

European users will still hold the ability to withdraw their assets until midnight on the deadline.

Many prominent exchanges took quick action to delist USDT following the implementation of MiCA, although sell-only transactions have been permitted until the end of Q1 2025. This development could present Circle with an opportunity to expand its market presence in the EU.

Reasons Behind Binance's Delisting

MiCA, the EU’s extensive new legislation concerning stablecoins, has prompted exchanges like Coinbase to adhere more closely to regulatory requirements. Binance had previously taken measures to comply with these regulations by limiting unregulated stablecoins for its EU clientele.

Despite these precautions, with MiCA taking effect in December, Binance has just recently announced its decision to delist Tether’s USDT.

“We are adjusting the availability of non-MiCA compliant stablecoins in the EEA to adhere to regulatory standards. The assets affected include USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC, and PAXG,” the company stated.

As the largest stablecoin globally, Tether’s USDT has faced challenges due to MiCA's demands. Most other exchanges had already delisted USDT by December, leading to a significant drop in its market capitalization by $2 billion.

While Binance temporarily retained Tether products within the EU, this accommodation is now coming to an end, with withdraw-only functionality set to cease.

The recent announcement references EU guidance issued in January; however, the bulk of previous delistings occurred ahead of the designated deadline, which is March 31. Binance has opted to extend the option for as long as it can, planning to cease Tether’s USDT availability one minute before the day’s end.

Although Tether maintains that MiCA will not result in long-term repercussions, the firm had proactively made plans months in advance. It remains uncertain what additional impact this delisting by Binance will have on Tether’s standing; nonetheless, it is undoubtedly not a positive development for the stablecoin.

In the meantime, Circle appears poised to take advantage of this situation, with expectations of increased market share in the EU following the implementation of MiCA. Earlier, Circle had indicated plans to leverage the new regulations to expand their own stablecoin's presence.

Additionally, preparations for competition with smaller stablecoin issuers like Ripple have also been a focus for Circle.

Ultimately, Binance’s decision to delist USDT continues to represent further adversity for Tether, which may now find itself in a precarious position. Earlier this year, Coinbase indicated they would also cease offering USDT if similar regulations are enforced in the US, underscoring the concern surrounding stablecoin audits and reserve compliance.