The EU Markets in Crypto-Assets Regulation (MiCA) comes into force today, July 1. Licensed exchanges are quickly removing Tether (USDT) from their platforms, while Circle is actively moving to fill the vacant space.
Remarkably, one company had been carefully preparing for this moment for several years. The other, however, decided that complying with Europe’s new, stringent requirements would be too costly.
How Circle Is Embracing Europe
Circle prepared for the changes well in advance. The company ensured full MiCA compliance for its USDC and euro-denominated EURC stablecoins. Among the ten largest stablecoins, Circle is the only issuer to comply with the new requirements.
Tether failed to submit the electronic money issuance application required under MiCA. As a result, approximately $185 billion in USDT is now unavailable on licensed European exchanges.
Tether’s decision appears to be a calculated strategy. CEO Paolo Ardoino publicly defended the company’s position, explaining that MiCA’s requirement to hold 60% of reserves in European banks creates risks of its own. Instead of adjusting its reserve model to meet the new standards, Tether’s management chose to focus on non-EU markets.
The timing also worked in Circle’s favor. One day before the deadline, BNY Mellon announced the launch of USDC support. Institutional clients can now hold, transfer, issue, and burn USDC through BNY’s service. Combined with changes on European exchanges, this gave Circle regulatory and institutional momentum on two continents in a single week.
The Issue Is Not Only About Regulation, but Also About Business
The implications of these changes extend beyond stablecoins. Of the approximately 1,200 crypto firms registered nationally before MiCA, only about 210 have received full crypto-asset service provider (CASP) authorization: a mere 17%.
The key point is that Circle has been building a long-term strategy for years. Now that regulated platforms can no longer provide liquidity through USDT, Circle is ready to take its place. Tether may still return and apply for a European license, but so far there is no clear sign of that happening.