I hear the sound, but I don’t know where it’s coming from, or what will happen to USDT?
You've probably heard the news that one of the major exchanges, Coinbase, is "delisting" USDT (essentially EAA users won't be able to use the stablecoin) because Tether is not compliant with MiCA, a regulatory framework that provides clear guidelines and standards for cryptocurrency market participants to ensure consumer protection and maintain market integrity.
Now to the point
Why Tether can't or won't get a license in Europe? Tether CEO criticizes MiCA for requiring 60% of reserves to be kept in bank deposits. Given USDT's capitalization of $118 billion and a deposit guarantee fund of up to €100,000, yes, it doesn't look too reliable.
Let's remember the bankruptcy of Silicon Valley Bank and discounts on USDC - a very reliable scheme?
Could delisting destabilize USDT? For a very short period - maybe. Globally - I doubt it. Why?
• Exchanges will not delist USDT. They will restrict access for EAA users. For example, OKX did this back in March 2024.
• Europe has never been the largest crypto hub in the world. There are other regions with greater concentrations.
Is USDT safe to store? The latest report shows the following asset structure:
• Cash and equivalents and other short-term deposits: 84.24%
• Secured loans: 5.55%
• Bitcoins: 4% 😁
• Precious metals: 3.22%
• Other investments: 2.98%
• Corporate bonds: 0.01%
As we can see, it's a hodgepodge. In addition, there is no transparency and full-fledged audit.
Conclusion: USDT is not the best option for storage, but it is the best option for exchanging it for other crypto.
