USDT Dominance Grows as EU Prepares to Welcome USD Stablecoins Amid US Regulatory Pressure

The European Union is on the verge of a significant policy shift that could see dollar-backed stablecoins like USDT flood its markets, as reported by Moody's. This development comes as the U.S. advances its own stablecoin legislation, compelling the EU to adapt or risk losing relevance in the global crypto economy. Analysts view this as a major win for USD-pegged stablecoins, signaling potential growth and increased adoption. The European Central Bank's previous objections appear to be overridden by the need to remain competitive. This move could further cement USDT's position as the dominant stablecoin in international markets, with far-reaching implications for crypto liquidity and cross-border transactions in Europe.

USD Stablecoins Could Flood Europe as US Legislation Forces EU's Hand: Moody's

The European Union is preparing to allow foreign, dollar-backed stablecoins into its markets, despite objections from the European Central Bank. This shift comes as the U.S. moves closer to passing stablecoin legislation, pressuring the EU to adapt or risk becoming irrelevant in the global crypto economy.

Moody's analysts suggest the EU's reversal signals a victory for U.S. dollar-pegged stablecoins. The European Commission will soon issue guidance treating internationally issued stablecoins as equivalent to their EU-specific counterparts, according to the Financial Times.

European Central Bank President Christine Lagarde has repeatedly warned against the risks of foreign stablecoins, particularly those tied to non-EU currencies. The impending policy change reflects growing recognition that regulatory isolation could marginalize Europe in digital asset markets.

Coinbase Teams Up With Secret Service to Seize $225M in Stolen Crypto

Coinbase has partnered with the U.S. Secret Service in a significant operation targeting pig butchering scams, resulting in the recovery of $225 million in USDT. The joint effort traced stolen funds to 39 wallet addresses, later linked to 140 accounts on the OKX exchange. Several of these accounts were tied to victims trafficked into Southeast Asian scam compounds, highlighting the human trafficking dimension of such fraud schemes.

Between February 26 and 29, 2024, Coinbase collaborated closely with the Secret Service in a multi-day investigation sprint. Blockchain analysis and subpoena records identified over 130 Coinbase customers who were unknowingly defrauded, totaling $2.3 million in losses. The restitution process for victims is now underway.

EU Set to Loosen Stablecoin Rules Despite ECB Warnings

The European Commission is moving to relax regulations on foreign-issued stablecoins, potentially enabling widespread circulation of dollar-backed tokens like USDC and USDT within the bloc. This policy shift, reported by the Financial Times, WOULD mark a significant departure from current restrictions under MiCA that require stablecoin issuers to maintain euro-denominated reserves and EU-based banking relationships.

The proposed guidance would grant equivalence status to non-EU stablecoins, effectively treating them as equal to European-regulated alternatives. This comes despite vehement opposition from the European Central Bank, with President Christine Lagarde having repeatedly warned about risks to financial stability and monetary sovereignty.

The MOVE coincides with growing regulatory clarity in the U.S., where the GENIUS Act has established a national framework for stablecoin oversight. Market observers suggest this transatlantic regulatory alignment could accelerate institutional adoption of dollar-pegged stablecoins in European markets.