Tether’s USDT Locked Out of EU Exchanges as MiCA Deadline Hits

Tether has reportedly begun restricting access to its USDT stablecoin for users on European exchanges as the European Union's Markets in Crypto-Assets (MiCA) regulation deadline approaches. The new regulatory framework imposes strict requirements on stablecoin issuers, including mandatory authorization as an Electronic Money Institution (EMI) and specific reserve management standards. Tether has expressed concerns regarding the technical and regulatory feasibility of these requirements, particularly regarding the custody of reserves and the potential for forced liquidity events. This development marks a significant shift in the RWA landscape, as USDT currently serves as the primary liquidity layer for the broader crypto ecosystem. By limiting access to the most widely used stablecoin, European exchanges face potential volume declines and increased competition from compliant alternatives. The situation highlights the growing friction between decentralized global assets and localized regulatory regimes like MiCA. This move underscores the broader challenge of integrating dollar-pegged RWA tokens into strictly regulated financial jurisdictions without compromising their operational model.