Cryptocurrency giant Tether is deploying profits generated from its massive $130 billion US Treasury holdings into a diverse investment portfolio, backing over 120 companies across various industries. This expansion beyond its core stablecoin business generated an impressive $13.7 billion in profit during 2024, solidifying its financial power.
However, Tether faces significant obstacles to operating in the European Union due to the Markets in Crypto Assets (MiCA) regulations. MiCA imposes stringent requirements on stablecoin issuers, including mandatory reserve backing, enhanced transparency protocols, and strict transaction caps.
Tether CEO Paolo Ardoino has stated unequivocally that the company will not pursue entry into the European market under the current regulatory regime. Ardoino emphasized that Tether awaits changes making the rules ‘safer for consumers and stablecoin issuers’.
The company continues to face scrutiny over its transparency practices; Tether has not undergone a comprehensive audit since 2017, fueling ongoing criticism and concerns from regulators. This lack of publicly verified reserves directly conflicts with MiCA’s core principles.
Demonstrating the regulatory hurdles, the European Securities and Markets Authority (ESMA) has already listed 53 crypto firms approved to operate under MiCA, a list notably excluding both Tether and Binance as issuers of significant stablecoins aiming to serve the European market.