MiCA Squeezes USDT in Europe as Global Demand Holds Firm

The European Union’s Markets in Crypto-Assets Regulation, or MiCA, is the world’s first comprehensive cryptocurrency regulatory framework. It requires stablecoin issuers to obtain electronic money institution authorization to operate in Europe, with the aim of preventing systemic market risks. Tether, the issuer of USDT, the world’s largest stablecoin, has yet to secure authorization, and the new rules are having a major impact on liquidity and the trading ecosystem in Europe.

After MiCA’s stablecoin transition period ended on July 1, digital bank Revolut announced that it would delist USDT trading in the European Economic Area and Switzerland in August. Exchanges including Coinbase and Binance have also been gradually delisting non-compliant stablecoins. The shift has allowed Circle’s compliant stablecoins USDC and EURC to expand rapidly, while the EU is also considering bringing non-euro stablecoins and tokenized assets within the scope of future reviews.

The European Union's Markets in Crypto-Assets Regulation, or MiCA, establishes uniform rules for crypto-asset issuance, trading and service providers, while imposing stricter requirements on stablecoins. As stablecoin payments and decentralized finance, or DeFi, expand rapidly, restrictions on interest and the potential regulation of decentralized services have become critical issues for market competition and investor protection.

The European Commission recently opened a public consultation on whether MiCA's existing digital-asset framework remains fit for market needs. The review focuses on stablecoin interest rules and potential loopholes that could allow DeFi businesses to exploit classification definitions to avoid regulation. Industry participants may submit comments through August 31, and the feedback will inform discussions about amendments widely referred to as “MiCA 2.0.”

The European Union’s Markets in Crypto-Assets Regulation, or MiCA, requires euro-denominated e-money tokens to be fully backed by reserves and prohibits interest payments to holders, measures intended to prevent stablecoins from replacing bank deposits. The market capitalization of dollar stablecoins has surpassed $300 billion, while euro stablecoins account for less than 1% of global supply, raising implications for Europe’s payments autonomy and the euro’s international standing.

On April 27, 2026, Blockchain for Europe published a report by Ulrich Bindseil and Erwin Voloder stating that MiCA covers only three of the 50 largest stablecoins. The report called for easing requirements that general issuers hold 30% of reserves in bank deposits and significant issuers hold 60%. It also proposed allowing limited returns linked to reserve income and broadening the range of eligible, highly liquid euro-denominated assets.

Stablecoins use fiat-currency reserves to maintain their value and can bridge traditional finance and onchain transactions. SG-FORGE, the digital asset subsidiary of Societe Generale, issues USDCV with a face value of $1 per token and reserves held in custody by BNY. It is classified as an electronic money token under the European Union’s Markets in Crypto-Assets regulation, or MiCA, and its compliant status could help bring bank assets into Web3.

SG-FORGE and MetaMask developer Consensys announced the completed integration on April 15, 2026. USDCV was added to MetaMask’s selection of featured stablecoins on its mobile and web platforms, allowing millions of users to use it for fiat on- and off-ramps, cryptoasset trading, DeFi and Gas Station fees. Approximately 26.337 million tokens were in circulation as of that date.