At a time when Donald Trump promised to make America the crypto head, Europe followed a different path with the Tether Ban. Tether (USDT) is the biggest stablecoin, and it is considered ideal for crypto transactions due to its value being pegged to the dollar. However, the same stablecoin could possibly trigger a crypto market crash.
Will Tether Ban Result In Crypto Market Crash?
Tether’s failure to adhere to Europe’s Markets in Crypto-Assets (MiCA) regulations is putting the stablecoin in major trouble. According to MiCA standards, stablecoins like Tether require an e-money license to trade on crypto exchanges. However, USDT missed its timeline, making it prone to the Tether Ban in Europe, resulting in its delisting from many crypto exchanges on December 30, 2024.
This Tether news could impact the crypto market for the worse due to this digital assets position in the market. It is the third biggest crypto after Bitcoin and Ethereum and has a market capitalization of $139.28 Billion. Additionally, Tether is the most widely held asset which will be heavily impacted by this step.
Notably, this delisting could create major liquidity issues, which could create crypto crash-like situations, especially with the investor’s sentiments already moving away from greed. This delisting will also impact the crypto’s USDT pair trades, crypto transactions, and crypto trade fees. Eventually, this could bring a liquidity drought and a crypto market crash.