The stablecoin market is experiencing rapid growth. According to recent reports, there are now over $176 billion in stablecoins, with adoption spreading among both retail and business users worldwide. Within this booming market, one stablecoin stands out: Tether (USDT).
As interest rates have risen, Tether has emerged as one of the most profitable companies globally. Holding close to $100 billion in U.S. Treasury holdings, Tether ranks 18th worldwide among entities holding U.S. debt—outranking countries like Germany, the United Arab Emirates, and Australia. And the best part? Tether is collecting the yield on those treasuries. In the first half of 2024 alone, the company reported a profit of $5.2 billion—generated by a team of fewer than 100 employees.
With Tether’s rapid growth, you might wonder who is using these stablecoins. Who is holding the USDT that funds this $100 billion investment into treasuries without seeing any of the associated returns?
Thanks to the transparent nature of blockchain transactions, we have some insights. While Tether’s usage in smart contracts is growing, it is primarily held by externally owned accounts (EOAs)—accounts controlled by private keys, similar to individual user wallets. On Ethereum alone, the supply of Tether held in EOAs has risen to $37 billion, making up 84% of its total supply (Source). These trends reflect the growing adoption of digital dollars not only as a store of value or hedge against volatility but also for their use in transactional activities, such as trading and payments.
Since its launch in 2014, Tether has facilitated over $13 trillion in transfers, highlighting its widespread usage. Much of this adoption has come from emerging markets in Africa, Latin America, South Asia, and other regions, where Tether often substitutes for the U.S. dollar (Source).
Tether’s transfer volume is nearing $14 billion on the Tron blockchain, supported by almost 1 million active addresses. This rapid usage is driven by Tron’s low transaction fees, making it ideal for low-value payments and remittances. The network’s deep liquidity across exchanges further enhances USDT’s role as a transactional asset.
Despite Tether’s undeniable growth, its future in Europe is shrouded in uncertainty. This is largely due to upcoming regulatory changes that will reshape the stablecoin landscape later this year.
For those seeking a secure, regulatory-compliant alternative, Stable Mint provides a solution that meets all European standards.
The Markets in Crypto-Assets Regulation (MiCAR) represents a pivotal moment for digital assets in Europe. MiCAR is being implemented in two phases, starting with the regulation of single fiat currency-denominated tokens (stablecoins) and asset reference tokens (ARTs). The second phase, beginning on 1st January 2025, will establish a comprehensive framework for Crypto Asset Service Providers (CASPs).
This CASP framework will replace the existing Virtual Asset Service Provider (VASP) regulations, which have varied across European states. Historically, VASP licenses have primarily focused on KYC (Know Your Customer) and AML (Anti-Money Laundering) compliance, without offering detailed guidance on asset management, custody, trading, or reserve management for stablecoins. The new CASP framework, overseen by the European Securities and Markets Authority (ESMA), will unify these standards, setting the stage for what is expected to be the most comprehensive digital asset regulation worldwide—a benchmark for global regulators.
While MiCAR is a milestone in regulating stablecoins in Europe, robust enforcement has yet to follow. As exchanges transition their VASP licenses to CASPs, they will need to closely align with MiCAR’s requirements. This includes stopping support for non-compliant stablecoins like USDT, TUSD, and USDP, should they wish to operate in Europe.
This is where Stable Mint comes in. As a fully regulated Electronic Money Institution (EMI), Stable Mint leads the issuance of compliant stablecoins within the European Economic Area (EEA). Our stablecoins meet the highest regulatory standards, offering a secure and transparent alternative in a market where compliance is a key differentiator.
While MiCAR officially took effect on 30th June this year, the anticipated seismic shift in the European stablecoin market has yet to fully materialize. Some exchanges, like Binance, have reduced instant buy features for Tether, while others, such as OKX, have already delisted it back in March this year. Yet, USDT still plays a significant role as a “Eurodollar” within the European crypto ecosystem—a status that will inevitably change.
As we approach the end of the year, we anticipate a gradual but accelerated migration of funds from non-compliant stablecoins like Tether to those that align with MiCAR’s regulations. This transition presents a significant opportunity for compliant issuers like Stable Mint, offering stablecoin holders a transparent, secure alternative backed by high-quality liquid assets and cash held off-balance-sheet with an AAA-rated bank.
As the regulatory landscape evolves, so too will the European stablecoin market. The future of Tether and other non-compliant stablecoins is uncertain, but one thing is clear: compliance will become increasingly important. For those seeking a secure, regulatory-compliant alternative, Stable Mint provides a solution that meets all European standards, offering peace of mind and enhanced security.
Join the businesses using Stable Mint to move money faster, safer, and without borders.
Stable mint Ltd. is a fully licensed Electronic Money Institution (EMI) authorised by the Malta Financial Services Authority in terms of article 4 of the Financial Institutions Act (Chapter 376 of the Laws of Malta) for the authorised activities of issuing electronic money as defined in the Third Schedule.
