MICA Mini Series #1: Why USDT and Other Stablecoins Are No Longer Supported in Europe

The European Union’s new Markets in Crypto-Assets (MICA) regulation has drastically changed the landscape for stablecoins. As a result, USDT, FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC, and PAXG are no longer supported in the European market. This regulatory shift impacts users, businesses, and financial institutions dealing with these assets. Understanding why this happened, what it means for stablecoin holders, and how to transition to compliant alternatives is crucial for anyone operating in the crypto space.

What is MICA and Why Does It Matter?

MICA is a comprehensive regulatory framework designed to establish clear rules for crypto assets within the European Economic Area (EEA). For a deeper dive, read Chainalysis’ analysis of MiCA’s stablecoin regime . Key goals of MICA include:

• Increased Transparency: Ensuring stablecoin issuers meet strict disclosure requirements.
• Consumer Protection: Reducing risks related to unregulated digital assets.
• Financial Stability: Preventing the widespread use of non-compliant stablecoins in the EU financial system.

Under MICA, only stablecoins that meet stringent reserve, transparency, and regulatory approval criteria are allowed to operate in the EU.

Why Are USDT and Other Stablecoins No Longer Supported?

• Lack of Regulatory Approval: Non-compliant stablecoins did not meet MICA’s licensing requirements .
• Insufficient Transparency: Issuers failed to provide clear reports on asset backing and reserves.
• Financial Stability Concerns: The EU aims to reduce reliance on stablecoins with potentially volatile reserves.
• Regulatory Oversight: Many issuers operate in jurisdictions with lax regulatory frameworks, conflicting with EU policies.

List of Affected Stablecoins

The following stablecoins are no longer supported under MICA:

How This Affects Users and Businesses

For Individual Users:

• You cannot send, receive, or trade these stablecoins within EU-regulated platforms.
• Holding these assets may result in liquidity issues or devaluation.
• Limited options for converting USDT and others into fiat on compliant exchanges.

For Businesses and Merchants:

• Payment processors will block transactions involving non-compliant stablecoins.
• Regulatory penalties for companies that continue using banned stablecoins.
• Reduced cross-border payment efficiency due to the removal of major stablecoins.

What Should You Do Next?

Transitioning to MICA-Compliant Stablecoins

Users and businesses should shift to MICA-approved alternatives, which include:

How Banxe Can Support Your Transition

While Banxe’s authorised service providers will also discontinue support for USDT and other non-compliant stablecoins to remain aligned with MICA, it continues to provide robust tools for managing MICA-compliant assets like USDC, EUR, and GBP. Through the service provided on the Banxe platform, users can seamlessly trade between supported fiat and crypto assets, including compliant stablecoins.

These services also include:

• Secure exchange options between fiat and crypto
• Business accounts with multi-currency support
• GBP and EUR wallets
• Crypto payment solutions for merchants

These tools ensure that users and businesses stay compliant and operational within the new EU regulatory environment.

The ban on USDT and other non-compliant stablecoins in Europe marks a major shift in crypto regulation. MICA prioritises transparency, financial stability, and consumer protection (see Forbes analysis ), forcing users and businesses to adapt. Transitioning to MICA-approved stablecoins ensures compliance and minimises risk.

The Banxe platform provides access to secure and compliant crypto exchange services tailored to the European regulatory landscape. To explore your options, visit Banxe .