TL;DR
- Tether invests in StablR, a European stablecoin issuer that complies with the MiCA framework regulations, which comes into effect on December 30, 2024.
- The investment is part of the company’s strategy to align with MiCA without modifying its own stablecoin, USDT, which does not meet all the requirements.
- The European stablecoin market has experienced significant growth, with a value nearing $400 million.
Tether, the world’s largest stablecoin issuer, is advancing with its strategy to expand in the European cryptocurrency market.
The company has decided to invest in StablR, a European stablecoin issuer that complies with European Union regulations, specifically the MiCA (Markets in Crypto-assets) framework. The new regulations, which will come into effect on December 30, 2024, require stablecoin issuers to operate under strict compliance standards.
Tether’s investment in StablR is part of a plan to align with MiCA regulations without having to directly modify its own stablecoin, USDT, which does not meet all the requirements of the new European regulatory framework.
Tether Cannot Deal with MiCA Regulations
Despite being the global leader in transaction volume, USDT has encountered some issues due to its lack of compliance with MiCA rules, leading to its delisting from several crypto exchanges in Europe. Rather than attempting to adjust its existing stablecoin, the company has chosen to invest in projects like StablR, which are already formed under European regulatory oversight.
StablR, which offers the EURR and USDR stablecoins, is fully authorized by the Malta Financial Services Authority, allowing it to issue these assets under MiCA standards. The company will also use Hadron, a tokenization platform launched by Tether last month, to simplify the process of converting traditional assets into digital tokens. Hadron provides a range of compliance tools, including anti-money laundering measures and risk monitoring.
The European stablecoin market has grown significantly in recent months, especially due to the upcoming implementation of MiCA. Currently, the market for euro-backed stablecoins is valued at nearly $400 million