USDT banned in Europe. What does this mean for the US? by Mriganka Pattnaik

all right uh hi everyone um I'm rank one of the co-founders and the CEO of Merkel science uh thanks for staying behind and this is probably one of the last few presentations before uh the drinks events so I'll make it worth your time um before I start uh the topic is essentially usdt is banned in Europe I love to ask the audience some questions so um like how many people in the audience just a show of hands think that usdt is banned in Europe or tether is Europe all right uh question number two how many people think tether voluntarily left Europe okay I see some show fans here well the answer to both is actually more like a maybe the gentleman upfront like most things in crypto policy all the answers are maybe right so um let's get started so uh Merkel science we do blockchain analytics and forensics essentially help Trace illicit crypto activity um we work with some of the largest crypto exchanges protocols as well as law enforcement agencies to help them Trace illicit cryptocurrencies some Basics about Mica so Mica was enforced on December 30th 2024 so markets and crypto assets regulation for Europe they categorize stable coins as EMTs and art tether is not an EMT right so um essentially as the previous panelist mentioned my car has a lot of strict requirements strict Redemption rules Reserve asset requirements local presence obligations and restrictions on interest bearing stable coins a large percentage of reserves also have to be stored in uh liquid deposits uh that's a big problem for a lot of stable coins because they can't earn interest on it right so couple of problems here for tether number one they're based in Hong Kong their headquarters isn't in Europe they would intrinsically have to change their structure to be compliant with Micah number two all of these strict like requirements specifically the interest bearing portion is a big problem for them this is why tether never applied for the EMT to uh license esma in January said that tether therefore is non-compliant with M and then what happened is a bunch of European exchanges crypto.com I think okx and uh coinbase all Dlisted usdt so this is why the answer to both is maybe we don't know if um they were banned from Europe per se and we also don't know whether I mean tether voluntarily left Europe it's it's all down to speculation more importantly what are the global consequences of tether's exit from the EU you so the results are clear limited consumer Choice tether is the largest stable coin in the world so uh there is a perception element to this as well some economies optimize for Innovation some economies optimize for uh safety so it turns out that Europe has chosen safety and stability versus Innovation so there is a perception that the US might be better for stable coins that want to grow so again what this means is a lot of protocols out there a lot of stable coin projects do have a central gravity in Europe but we'll now focus a lot more on the US because regulatory guidelines are expected this year optimism there's a lot of optimism in terms of policy and general momentum so you'll see a lot more activity all across the US so little bit about the US stable coin regulation so the past the US lacks of federal stable coin framework there typically been regulation by enforcement conflicting state laws that cause uncertainty the most important thing for the US is the genius act so essentially I I think Rob on the last panel talked about it everybody in DC is talking about it uh there is an expectation that will be passed this year so they do set guidelines AML CFT guidelines for stable coins stable coin issuers they have Reserve guidelines as well but the most important thing that they do is that they categorize who's going to have oversight so financial institutions with value greater than 10 billion will have oversight by the FED Reserve non-bank issuers by the OCC and any other issuers of stable coins under that value will will be regulated by state level Regulators right so this piece of guidance is extremely important along with everything else in the act because now the regulator is not uncertain it is very clear who's going to be regulated by who now what what does this mean for us so essentially the path forward the three key things learning from the EU so the next 6 months we'll know what the impact has been of MAA on the stable coin industry in the EU um we will get to know whether volumes have dropped in crypto exchanges because they've Dlisted tether has there been a drop in the projects coming out of the EU and that'll provide data points on stable coin regulation for the US of course the most overused word collaboration is key so public private collaborations all across the board are going to be key and um merkel's role so merkel's a reg Tech provider so more of an infrastructure provider we love crypto we love regulation we are just here to interpret it and provide tools to protocols crypto exchanges for it so essentially we provide a product called like a packaging uh essentially of all our Solutions compliance Solutions wallet screening Solutions proof of reserves and forensics we've seen a lot of protocols in stable coin issuers starting to use this either they want to create a safe ecosystem where the protocol proactively marks North Korean addresses proactively wants to stop crime or they encourage the ecosystem to start using compliance tools and forensics tools to U like abide by regulation and grow so that brings me to to the end of the presentation I guess two key insights one stable coins are going to explode they're already exploding they are the primary use case of crypto which is leading to mainstream adoption again some would argue that it's meme coins but we can all agree that stable coins are probably the most serious form of crypto adoption across the world number two the most like the next time backin freed is probably going to come from the stable coin World wherever there is a boom there is a bust you're definitely going to see some of these Innovative entrepreneurs in the St coin industry either get arrested or uh like pay our fines so it's essential that we have regulatory guidance and compliance and forensics in the space all right thank you everyone enjoy the rest of your evening