Tether recently shut down operations of its Euro Tether (EURT) after facing heavy challenges from regulators in Europe.

The company failed to comply with Markets in Crypto-Assets (MiCA) regulations, which are the European Union’s new digital asset regulations.

MiCA was incorporated to ensure greater transparency, security and resilience in the cryptocurrency market.

The withdrawal of EURT raises serious questions regarding Tether’s ability to operate with stringent regulatory regimes, a hard moment for crypto Europe.

To cut down the volatility and risks of digital currencies, European regulators have drafted the MiCA regulations. Another regulation they could not survive was EURT, which required either too many adjustments (or costs) that were needed, so the project was stopped.

Tether’s exit from the European market illustrates how MiCA will affect the way other cryptocurrencies in Europe navigate relations with regulators.

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Prospective Regulatory Challenges in the US For Tether

That brings us to the United States where we are on the verge of a real regulatory reform under the incoming Trump administration.

Last week, a cryptocurrency analyst put out a tweet speculating about the potential ramifications of Tether if the US adopted a regulatory direction comparable to Europe’s.

Tether’s US operations, particularly US Dollar Tether (USDT), could experience similar compliance failures. This could disrupt not only Tether but the wider cryptocurrency market, according to the tweet.

In contrast with Europe, Donald Trump’s administration has taken a more favorable stance towards the process of crypto regulation.

This is partly because the crypto industry has been making large, historical political contributions (for crypto) to Trump’s campaign.

Notably, this contribution is greater than that traditional sectors like fossil fuels. Promises such as making Bitcoin part of the country’s reserves, and Trump’s positive rhetoric towards cryptocurrencies suggest a silver lining for the digital currency world.

Historical Context and Trump’s Economic Policies

America’s monetary history could offer insights. The analogy between primitive currencies like wampum used by early American settlers and the crypto on Bitcoin is what ‘crypto president’ Bitcoin has conquered America highlights.

Cryptocurrencies, like primitive currencies, do so on confidence about the value of each cryptocurrency.

Being more historically indicative of Trump’s willingness and propensity to take financial risk and economic risk, rather than representing some stability risk as a way to characterise cryptocurrencies.

Trump may be more inclined to view cryptocurrencies as a modern means of economic innovation, not a source of discursive risk.

However, uncertainty comes from the unpredictability of Trump’s policies. But how tethered does the US become to the crypto custodians of data, trust, and security, or is Trump’s administration amid a wildcat banking–era for regulation resulting in regulatory disarray?

At this time, the lack of federal regulation resulted in unwanted financial instability in all states.

Trump’s dodgy dealings in the past and the current perilous state of digital currency markets could either result in the roots of pioneering regulations that encourage growth or chaotic market conditions. This is if they’re not handled with vision and equilibrium.

Tether continues its withdrawal from Europe and looks beyond towards the US as the global crypto industry is on edge.

As the Trump administration has its early actions in the coming months, it will define the trajectory of the regulation of cryptocurrency in the US.

The question is, will his policies be as strict as Europe’s, or will it enable a more lenient approach, creating an environment that is both more innovative and propulsive for the crypto sector?