MiCA expelled USDT, USDC became focus

Circle claims that USDC is currently the only top ten stablecoins that comply with EU MiCA regulations.

Circle said that USDC is the only one of the world's top ten stablecoins that complies with the EU Cryptographic Asset Markets Regulation (MiCA). If this is true, it means that the EU's approximately 450 million residents will no longer be able to access compliant trading channels for most major dollar-backed stablecoins, including Tether's USDT.

The announcement comes as Europe is fully implementing its landmark encryption regulations. The regulation is changing the landscape of tradable stablecoins in the region, and has also sparked discussions about whether MiCA is really striking a balance between innovation and financial stability.

Only two Circle tokens have entered the compliance list

According to Circle's European regulatory page, USDC is the only token among the top ten stablecoins with market value that has been approved by MiCA. In addition, the euro-backed EURC has also been approved. The company claims that both tokens can be fully convertible into legal tender and that their reserves meet regulatory requirements and are open to the public. Circle released its reserve report on August 3.

Under the MiCA framework, stablecoin issuers must isolate reserves, issue regular audit reports, comply with customer redemption rights, and adhere to governance standards. Service providers for EU customers will no longer be allowed to provide stablecoins issued by issuers that do not meet these requirements.

The transition period ended on July 1. The European Securities and Markets Authority (ESMA) has called on all unauthorized companies to cease operations and reminded the public that the only legal crypto asset service operators in the EU and the European Economic Area are licensed companies.

Tighter regulations reflect regulators 'concerns about the growing role of stablecoins in the financial system. The European Systemic Risk Committee (ESRB) warned that stablecoin reserves are increasingly linked to banks and financial markets, requiring closer supervision of them to prevent broader financial risks.

The 60% reserve rule excludes Tether

The most difficult obstacle for large issuers is the reserve requirements under MiCA. Stable coins classified as "important" must keep at least 60% of their reserves in bank deposits within the EU. This classification applies to issuers that meet at least three of the seven conditions, namely: the number of token holders exceeds 10 million; the market value exceeds 5 billion euros; the average daily number of transactions exceeds 2.5 million and the total value exceeds 500 million euros; having a "gatekeeper" status; the global importance of issuer activities; financial relevance; and multi-token activities. The USDT meets all quantitative conditions.

Tether did not choose to comply, but decided to withdraw from the EU market and terminated its stablecoin EURT, which is pegged to the euro.

"After careful consideration, we decided to stop supporting EUR. As a result, Tether has stopped casting EUR, the last acquisition request was processed in 2022, and will no longer accept new EUR issuance requests thereafter. This decision is in line with our broader strategic direction, considering the evolving regulatory framework around stablecoins in European markets. Before establishing a framework that is more conducive to risk avoidance, encourages innovation, and provides the stability and protection users deserve, we choose to prioritize other projects."-- Tether informs users of strategic transformation to better support community-driven products

Tether CEO Paolo Ardoino said requiring issuers to move assets from short-term U.S. Treasury bonds to commercial bank deposits could have a negative impact on the stability of stablecoins, especially during times of financial stress. In a statement after an interview with Italian television, he said MiCA "poses a systemic risk to European banking stability" and added that Tether's withdrawal from the EU was because "we prefer to protect users who currently use USDT as the only stable currency option."

Criticism does not stop at Tether. Industry group Blockchain for Europe has urged the European Commission to review specific provisions in MiCA stablecoin regulations, noting that some regulations may hinder Europe's competitiveness.

removal event caused total trading volume to be almost flat.

The exchange responded quickly. Binance, Coinbase, Kraken and OKX decided to remove the USDT trading pairs from their European customer trading platforms to avoid the potential risk of MiCA violations.

Despite this, the overall cryptocurrency market has not seen the major changes many expected. According to a research report released in July 2026 by Nicola Borri, an economist at the University of LUISS, and Kirill Shakhnov, a researcher at the University of Surrey, the total share of USDT and USDC in the market has "barely moved" after being removed. In Europe, USDC's share of USDT-to-USDC transactions increased by about 6%, mainly due to a decline in USDT's trading volume by about 20% after it was removed, rather than increased market interest in USDC.

In addition, new security risks have emerged during the transformation process. According to recent information from Cryptopolitan, there has been a significant increase in impersonation fraud cases against customers trying to transfer assets to the MiCA compliance system.

Euro stablecoins set a record, and issuers flocked to

MiCA has also had a transformative impact on the euro-pegged stablecoins sector in Europe. DefiLlama data shows that in mid-2026, the value of euro stablecoins that meet MiCA standards will be close to US$900 million, setting a record in this field. CoinGecko listed Circle's EURC as the largest euro-backed stablecoin after the retirement of EURT, while Token Terminal data showed that the euro stablecoin's share of the approximately US$300 billion global stablecoin market is still well below 1%.

Regulators continue to approve new issuers. ESMA has authorized 19 issuers of e-currency tokens in 11 EU member states, and policy analyst Patrick Hansen estimates that as of the end of July, there were about 35 regulated e-currency tokens from 21 companies.

Traditional banks have also begun to venture into this field. A consortium of nine European banks, including BBVA, ING and UniCredit, will issue a euro stablecoin that complies with MiCA regulations, a sign that regulated banks view tokenized currencies as a key component of the future of the European payment system.

Despite this, the influence of the euro stablecoin on the international market is still limited. MiCA has promoted compliant issuance of euro-denominated stablecoins, but dollar-backed stablecoins still dominate cryptocurrency transactions, payments and liquidity.