Tether's "big gamble" in Europe: launch a new coin or bail-in?

Question

The iron fist of the EU MiCA regulations has come down, and Tether faces a fatal choice - either launch a new euro stablecoin to adapt to regulations or shrink in the European market.

The Crisis Behind Digital

USDAT accounts for over 70% of the global stablecoin market, with a market capitalization exceeding 100 billion USD. However, this king is now facing a downturn in Europe. According to on-chain data, the daily trading volume of USDT in Europe is approximately 5 billion USD, accounting for a quarter of global trading. Even more disheartening is that on mainstream exchanges in Europe, the proportion of USDT trading pairs reaches as high as 40%—what does this indicate? Tether has a strong user stickiness in Europe, and the cost of losing the European market is unimaginable.

Three new coins “take turns”

Tether's operation is a bit “live in the moment”:

EURT (Euro stablecoin) - Originally a star product, now frozen, only because its market value is 27 million USD (awkward)
EURQ + USDQ——A new generation product, in cooperation with Quantoz from the Netherlands, aimed at truly complying with MiCA standards.
StablR Investment - On December 17, Tether invested in StablR in Malta, which has euro coins and dollar coins.

Did you notice? Tether is “fighting on multiple fronts”, afraid that if one fails, everything will be lost.

The Truth of the Market: Opportunities vs Challenges

Who is leading the European stablecoin market now? Circle's EURC, with a market cap of 300 million USD, has left Tether far behind. But this is also an opportunity—industry predictions suggest that the European stablecoin market could exceed 5 billion USD by 2025.

JP Morgan predicts more aggressively: compliant stablecoins may carry $1 trillion in transaction volume by 2025. If Tether captures this part of Europe, its potential is incalculable.

Can a “criminal record” be expunged?

Tether carries a heavy historical burden: In 2021, it settled with the New York Attorney General for $18.5 million (for misreporting reserves). That year, it did not have a formal bank account and relied on third-party payment processors to survive, yet USDT skyrocketed from $10 million to $2 billion—this kind of growth indeed seems absurd in hindsight.

But to be fair, Tether has changed since then. The latest data shows that 85% of its reserves are U.S. Treasury bonds, a significant increase from 58% the previous year. This indicates that it is “self-rescuing”.

Key Question: Can Tether pass MiCA?

The MiCA requirements for stablecoins are very stringent: they need to have massive reserves, a physical presence in the EU, and transparency to the core. This puts a lot of pressure on Tether, but it's not a dead end. The newly launched EURQ and USDQ are designed to meet these standards, and they have local partners like Quantoz backing them.

Conclusion? Tether will not disappear in Europe, but its dominance will be diluted. New coins can successfully launch, and USDT's European “empire” can maintain its user base, while there will be more competitors, making the market healthier. This is actually good for users – more options and more diversified risks.