Tether Abandons Revolut Amid EU Regulations

Tether's USDT stablecoin will no longer be supported by Revolut, a mainstream banking app used by over 75 million customers, as of August 31. This decision is due to MiCA regulations that prohibit licensed platforms from offering non-authorized e-money tokens to European retail customers.

Tether deliberately avoided registering under MiCA's framework, instead choosing to invest in StablR, a Malta-based stablecoin issuer with an Electronic Money Institution license. StablR issues EURR and USDR, two tokenized stablecoins that meet MiCA requirements, and are processed via Tether's Hadron platform.

The exit from Revolut creates a $30 billion to $35 billion liquidity gap in European crypto markets, which is expected to flow towards Circle's USDC. However, Tether's proxy network faces challenges, including rebuilding trust after a recent mint exploit that exposed a gap between regulatory compliance and smart contract security.