1. Event Overview
From December 30, $USDT will be delisted from all EU exchanges. This news has sparked widespread attention and controversy in the market, with concerns that Tether's stablecoin could collapse, plunging to $0 like $UST did in 2022. Will we see a repeat of the 70% market crash caused by the FTX collapse? Below is an analysis of Tether's past and future.
2. Current Market FUD Overview
Recently, $USDT has faced significant fear, uncertainty, and doubt (FUD). This time is different, with more specific reasons behind it:
- The upcoming MiCA cryptocurrency regulatory framework in the EU means Tether cannot obtain the licenses required to operate in the EU market.
- This has directly led to all EU exchanges having to delist $USDT.
3. Long-standing Controversies Over Tether's Security
Questions about Tether's security have existed for a long time:
- Audit Issues: Tether has committed to audits since 2015, but it was not until 2021 that it collaborated with BDO to release an 'audit report,' which still was not a formal audit.
- Fines and Reserve Issues: In 2021, the U.S. Commodity Futures Trading Commission (CFTC) fined Tether over mismanagement of $850 million in funds. It was later discovered that its reserves included commercial papers with unclear sources, quality, and liquidity.
4. Impact and Response to New EU Regulations
- Impact of New Regulations: The MiCA regulations require stablecoin issuers to obtain licenses to operate, but Tether has not passed the relevant approvals.
- Countermeasures: Tether has invested in the StablR project, which fully complies with European regulations, to circumvent regulatory barriers and continue operations in the EU. This strategy may provide Tether with a breathing space but does not eliminate market concerns.
5. Is Tether 'too big to fail'?
Despite numerous controversies and risks, Tether has become an indispensable part of the entire cryptocurrency industry:
- The main reserve funds of Tier-1 exchanges are still $USDT.
- If Tether collapses, the entire industry may fall into a systemic crisis. Therefore, Tether's failure poses a threat not only to itself but also to the entire cryptocurrency industry.
6. Market Response Suggestions
The current market is turbulent; investors are advised to take the following measures:
- Short-term Strategy: Temporarily convert $USDT into more stable alternatives (such as $USDC) to mitigate potential risks.
- Long-term Observation: Although Tether seems 'too big to fail,' the uncertainty of regulatory policies and its long-term viability still require attention.
Conclusion:
$USDT's delisting from EU exchanges marks a significant challenge for Tether. However, given its position in the industry and its response strategies, Tether is likely to overcome this hurdle once again. In this turmoil, investors need to calmly assess risks and flexibly adjust strategies to protect their assets.
