Tether’s USDT, the largest stablecoin, experienced a 1.2% market cap drop to US$137 billion after the European Union’s Markets in Crypto-Assets (MiCA) regulations took effect on December 30, marking the sharpest weekly decline since November 2022.

The new rules mandate stablecoin issuers, like Tether, to hold at least 60% of reserves in low-risk EU commercial banks, posing challenges for global firms.

Over two weeks, USDT’s value dropped 2.7% from a US$141 billion peak on December 19.

Coinbase Europe also delisted USDT due to MiCA’s strict compliance requirements.