Tether Abandons EUR₮, a Blow to Non-Dollar Stablecoins

Tether, the issuer of the world's largest stablecoin, USD₮, has announced a significant decision: to discontinue support for EUR₮, the stablecoin pegged to the euro.

Tether, the company behind the world’s largest stablecoin, USD₮, has announced a major decision: it will discontinue support for EUR₮, the stablecoin pegged to the euro. This marks a critical juncture in the cryptocurrency sector and raises questions about the future of stablecoins pegged to fiat currencies besides the dollar.

The official announcement, published on November 27, 2024, states that Tether will cease supporting EUR₮ on all blockchains, including halting the minting of the token. Users are invited to redeem their holdings within a year, considering that the last minting request for EUR₮ was processed in 2022.

Why is Tether pulling the plug on the euro project EUR₮?

Tether has not provided detailed explanations on the motivations for this decision, but the context suggests some reasons.

The stablecoin EUR₮, despite being created to offer users an option pegged to the euro, never achieved the level of adoption of USD₮. The pervasiveness of the American dollar as a global reference currency is also reflected in the stablecoin market, where USD₮ continues to be the primary choice for investors and institutions.

Another factor could be related to regulatory complexity. Stablecoins pegged to currencies other than the dollar may encounter more fragmented regulations, particularly in regions like the European Union, which is implementing stricter laws on cryptocurrencies through the MiCA (Markets in Crypto-Assets) regulation.

The decision by Tether to eliminate EUR₮ marks a significant change for users and the cryptocurrency ecosystem. While the market volume of EUR₮ was relatively small compared to USD₮, the stablecoin served as an essential instrument for investors who prefer transactions pegged to the euro.

This choice could impact the stablecoin sector pegged to currencies besides the dollar, leading other companies to reevaluate their strategies. However, Tether has emphasized its continued support for USD₮, which maintains a market capitalization greater than all other stablecoins combined.

What should EUR₮ users do?

Tether has provided a one-year transition period for users to redeem their holdings in EUR₮. This means that until November 27, 2025, it will be possible to convert EUR₮ into euros through supported platforms. However, the company has stated that it will not accept new issuance requests for EUR₮, solidifying the decision to terminate the token's operations.

Investors and traders holding EUR₮ are thus advised to plan their strategies to avoid complications in the long term. The option to redeem the tokens serves as a clear solution, but it is crucial to act within the established timeframes.

Tether's choice to abandon EUR₮ reflects a broader market trend to focus on stablecoins pegged to the US dollar, which benefit from greater liquidity and adoption.

As the cryptocurrency ecosystem continues to evolve, this decision highlights how user demand and regulatory factors shape the strategies of the major companies in the sector.

For users who depended on EUR₮, it is now time to consider alternatives and keep an eye on any future developments. In the meantime, Tether will continue to bolster the role of USD₮ as a fundamental pillar of the global stablecoin market.