USDT No Longer Welcome ? Crypto.com Adapts To EU Crypto Laws

The European Union is intensifying its control over non-compliant stablecoins with its new regulations. Crypto.com has just announced the removal of Tether (USDT) and nine other cryptos in Europe, a decision that marks a turning point for the sector. Such an initiative directly responds to the requirements of the MiCA regulation (Markets in Crypto-Assets Regulation), which imposes strict oversight of stablecoins and associated services. Following Coinbase, which removed USDT in October 2024, Crypto.com is following suit and imposing a precise timeline for its users. Starting January 31, 2025, the purchase and deposit of these assets will be prohibited on its European platform. From March 31 onwards, any remaining funds will be automatically converted into MiCA-compliant stablecoins. This withdrawal goes beyond mere compliance. It reshapes the landscape of stablecoins in Europe, where exchange platforms must now adapt to new rules or face sanctions. In a rapidly evolving market, this announcement underscores regulators’ intent to impose a strict framework, and casts uncertainty over the future of decentralized stablecoins in the EU.

Crypto.com Enforces MiCA Regulation : A Scheduled End for USDT

Starting January 31, 2025, Crypto.com will block the purchase and deposit of USDT as well as nine other cryptos on its European platforms. Users will still be able to withdraw their funds until the end of the first quarter of 2025. After March 31, any remaining assets will be automatically converted to a MiCA-compliant stablecoin, thus ensuring a transition to regulated assets.

Indeed, USDT is not the only affected token. Other removed cryptos include Wrapped Bitcoin (WBTC), Dai (DAI), Pax Dollar (PAX), Pax Gold (PAXG), and PayPal USD (PYUSD). Some tokens specific to Crypto.com, such as Crypto.com Staked ETH (CDCETH) and Crypto.com Staked SOL (CDCSOL), are also impacted. Thus, this decision fits within the framework of European regulatory tightening, following a statement from the European Securities and Markets Authority (ESMA) on January 17, 2025. This document called on all exchange platforms to remove non-compliant stablecoins before the deadline of March 31.

By enforcing these new restrictions, Crypto.com positions itself as one of the first players to fully comply with the MiCA framework, a trend that is likely to extend to other platforms operating in Europe.

A Transitioning European Market : What Future for Stablecoins ?

The withdrawal of USDT in Europe goes beyond Crypto.com. Since the full enforcement of the MiCA regulation on December 30, 2024, several exchange platforms have begun restructuring their offerings to avoid any conflict with regulators. Coinbase had already taken this step in October 2024 by removing Tether from its platform and proposing an automatic conversion to USD Coin (USDC), a stablecoin deemed compliant with the European Union’s requirements.

This regulatory transition aims to enhance market transparency and stability, but it also raises concerns about the concentration of power among a few accredited issuers. To date, USDT remains the undisputed leader of stablecoins, with a market capitalization of $139 billion, compared to $52 billion for USDC. However, the European regulatory environment is becoming increasingly hostile for Tether, which could benefit USDC and allow for greater adoption on the Old Continent.

Compliance with MiCA redefines the landscape of stablecoins in Europe, prompting players to turn to regulated alternatives. This evolution raises questions about the future of decentralized stablecoins and the impact of these new rules on innovation within the crypto sector. While the EU seeks to secure its market, the consequences on the competitiveness and diversity of the crypto ecosystem remain uncertain.

The gradual implementation of MiCA deeply transforms the European crypto ecosystem. For some, this regulation enhances investor protection and brings better transparency to the market. But for others, it limits the diversity of stablecoins and favors already established players at the expense of decentralized alternatives. With the gradual disappearance of USDT, 2025 could mark a strategic turning point, where only compliant stablecoins will continue to exist on European soil. It remains to be seen whether this regulation will truly foster financial stability or if it will hinder innovation and market competitiveness in the long term.