Key Takeaway:
- The rise of Markets in Crypto-Assets Regulation in Europe questions Tether’s USDT stablecoin dominance.
- New MiCA regulation puts Tether’s market share at risk.
- Circle launches EURC compliant with MiCA regulation.
- Predictions suggest Tether’s market share may decrease in the future.
- Stablecoins are growing due to market volatility and convenience compared to fiat.
Concerns over Tether’s Dominance
With the introduction of Markets in Crypto-Assets Regulation in Europe, there are concerns about the long-term dominance of Tether’s USDT stablecoin. Tether currently holds a 70% share in the stablecoin market, with a market cap of $115.67 billion. However, Tether CEO Paolo Ardoino has expressed worries about the new MiCA regulation, which requires stablecoin issuers to keep 60% of their assets in EU-based banks.
Circle’s Response to MiCA Regulation
In response to the MiCA regulation, Circle has launched EURC, a euro-pegged stablecoin compliant with the new law. This move positions Circle as an early adopter of regulatory-compliant stablecoins, challenging Tether’s dominance in the market. EURC already boasts a market cap of $36.8 million on Coinbase’s Base blockchain layer-2.
Future Predictions for Stablecoins
Industry experts predict a shift in the stablecoin market landscape, with Tether’s market share potentially decreasing to 10-30%. As more stablecoins like EURC gain regulatory compliance and market acceptance, they may outperform Tether in the long run. The flexibility and convenience offered by stablecoins compared to traditional fiat currencies continue to drive their adoption and growth.
