Circle Backs MiCA Fix That Could Bring Tether Back
Circle wants the EU to be able to recognize foreign stablecoin rules under MiCA. That could potentially bring back Tether’s USDT, which is now mostly blocked in Europe.
Key Takeaways
- Circle supports a proposal for equivalence, which could let the EU recognize foreign stablecoin rules.
- Tether lost EU access under MiCA because USDT did not meet European requirements and no separate EU structure was set up.
- The European Commission is reviewing MiCA, but a quick return for Tether to Europe still looks unlikely for now.
Circle is backing a proposal that could let Tether return to Europe without the issuer having to launch a new stablecoin. The proposal is built around so-called equivalence, a framework that would allow the EU to accept a crypto company’s home-country rules instead of forcing it through a separate European setup.
MiCA Leaves Little Room Right Now
MiCA is the EU’s main rulebook for crypto and stablecoins. Its stablecoin rules have been fully in effect since July 1, but Circle says one major piece is still missing: there is no mechanism for treating foreign rules as equivalent to European standards.
That leaves international issuers with a narrow path into the bloc. To serve EU users, they first need to establish a licensed EU entity. Patrick Hansen, Circle’s head of EU policy, describes that as the tougher route for global stablecoins.
There is also the fact that MiCA divides stablecoins into two groups, Asset-Referenced Tokens and Electronic Money Tokens, and each comes with its own issuer requirements. For larger stablecoin issuers, another rule adds pressure by requiring a significant share of reserves to be held in banks, raising the bar even further for non-European firms.
Tether Chose the Exit
Tether, the largest stablecoin issuer, did not go down that road. USDT has a market value of about $184 billion (€162 billion) and was pushed off or removed from several crypto exchanges in Europe after it failed to meet MiCA requirements. The company keeps most of its reserves in U.S. Treasury bills, while MiCA requires at least 60% of the backing to sit in bank deposits for significant issuers.
Rather than restructure USDT, Tether opted to give up EU access. An equivalence framework could change that outcome. If the EU were to accept Tether’s home-country rules, USDT could return without the need for a separate EU token.
Even so, that still looks like a long shot for now. Tether is based in El Salvador, has not yet been approved under the new U.S. stablecoin law, and even launched a separate U.S. coin instead of changing USDT itself. That makes a fast comeback in Europe seem unlikely.
Why This Matters for Europe
For European crypto investors, the bigger point is that MiCA does more than screen out existing stablecoins. It also decides which global issuers can stay in the market at all. Circle is already on the compliant side with USDC and EURC, while rivals could potentially regain access through a new political path.
The European Commission opened a review of MiCA in May 2026, and that is where a change like this would likely be considered. Still, the politics remain delicate, especially with so many major stablecoins tied to the dollar and the European Central Bank also working on a digital euro.
