Tether, the world’s largest stablecoin issuer, is facing both competitive and regulatory challenges while also making strides in improving user experience. On one front, CEO Paolo Ardoino has accused rival stablecoin firms of attempting to push Tether out of the market through legal and regulatory means, particularly in light of the European Union’s MiCA framework excluding USDT from its list of approved stablecoin issuers. Meanwhile, in a bid to enhance its usability, Tether’s USDT will soon support gas-free transactions on the Tron blockchain, according to Tron founder Justin Sun.
Tether CEO Accuses Competitors of 'Lawfare' as MiCA Excludes USDT from Stablecoin Market
Tether’s CEO, Paolo Ardoino, has issued a scathing critique of the company’s competitors, claiming that rival stablecoin issuers and political entities are conspiring to push Tether out of the cryptocurrency market. Ardoino’s comments come as Europe’s new Markets in Crypto-Assets (MiCA) regulatory framework excludes Tether from the list of approved stablecoin issuers, intensifying challenges for the world’s largest stablecoin.
Tether, which issues USDt (USDT), remains the dominant force in the stablecoin market, with a staggering $142 billion market capitalization—more than twice the size of Circle’s USD Coin (USDC), which stands at $56 billion. Despite its dominance, Ardoino argues that competitors are resorting to regulatory and legal tactics, rather than fair competition, to undermine Tether’s influence.
“While our competitors’ business model should be to build a better product and an even bigger distribution network, their real intent is ‘Kill Tether,’” Ardoino wrote on X on Feb. 25. He further alleged that these competitors prioritize ‘lawfare’—the use of legal and regulatory strategies to eliminate opposition— instead of fostering innovation.
Although he did not name specific entities, the timing of his remarks suggests that Europe’s MiCA framework played a key role in his concerns.
The European Union’s MiCA regulations, which took effect at the end of 2024, have already begun reshaping the stablecoin landscape. Under these new rules, only 10 firms have been approved to issue stablecoins in the European market, and Tether is not among them.
The list of approved firms includes:
Circle (issuer of USDC)
Banking Circle
Crypto.com
Fiat Republic
Membrane Finance
Quantoz Payments
Schuman Financial
Société Générale
StabIR
Stable Mint
These firms have collectively issued 10 euro-pegged stablecoins and five US dollar-pegged stablecoins, signaling a major shift in the European market away from USDT.
Patrick Hansen, senior director of EU strategy and policy at Circle, highlighted the approvals, emphasizing that the European regulatory framework is designed to promote stability and compliance. However, critics argue that the exclusion of USDT—by far the most widely used stablecoin globally—raises concerns about potential regulatory favoritism.
The consequences of Tether’s exclusion from MiCA compliance are already being felt across the European crypto industry. Some major exchanges have announced that they will delist USDT and other non-compliant stablecoins.
Kraken, a leading crypto exchange, announced that it will stop trading USDT and four other stablecoins in Europe starting March 31, 2025. The company cited MiCA compliance as the reason behind the move.
Crypto.com also confirmed that it will delist USDT and nine other stablecoins by Jan. 31, 2025. Users will have until the end of Q1 2025 to convert their USDT holdings into MiCA-compliant assets, after which any remaining balances will be automatically converted to an approved stablecoin.
This wave of delistings could significantly reduce USDT’s liquidity and adoption in Europe, forcing traders and businesses to seek alternative stablecoins that meet MiCA’s regulatory standards.
Despite these challenges, Tether remains committed to its mission of financial inclusion, particularly in underdeveloped markets. Ardoino emphasized that USDT is used by more than 400 million people worldwide and is adding 35 million new wallets per quarter—a clear sign of its continued demand beyond Europe.
Tether has historically played a crucial role in emerging markets where access to stable currencies is limited. USDT has become a preferred store of value in countries with high inflation, including Argentina, Turkey, and Nigeria. Its ability to offer dollar-backed stability without requiring a traditional bank account has made it indispensable for millions.
However, with MiCA tightening the regulatory noose in Europe, Tether may face similar challenges in other jurisdictions if regulators decide to follow the EU’s lead.
MiCA’s Hidden Risks: Banks and Systemic Stability
In addition to pointing out potential regulatory bias, Ardoino has also warned that MiCA’s approach to stablecoin reserves could introduce new systemic risks.
Under MiCA regulations, stablecoin issuers must hold 60% of their reserves in cash deposits at regulated banks. However, banks are permitted to lend out up to 90% of their balance sheets, which could create significant risks for stablecoin stability.
“If you have 10 billion euros under management, you have to put 6 billion euros in cash deposits. We know that banks can lend out 90% of their balance sheet. So, of the 6 billion euros, they lend out 5.4 billion euros to people […] leaving just 600 million euros in liquid reserves,” Ardoino explained in a recent interview.
This fractional reserve structure contrasts sharply with Tether’s own fully backed reserve model, which ensures that every USDT in circulation is backed 1:1 by cash or cash-equivalent assets. Ardoino warned that if MiCA-approved stablecoins rely on bank deposits that can be re-lent multiple times, it could introduce a level of systemic risk similar to traditional banking failures.
Tether has not yet announced any formal legal challenge against MiCA’s exclusion, but Ardoino’s remarks indicate that the company is unlikely to accept the decision quietly. Given its dominance in the stablecoin market, it may explore alternative compliance strategies or jurisdictional shifts to maintain its presence in the European market.
At the same time, Tether continues to expand into non-crypto financial services, including Bitcoin mining investments, artificial intelligence infrastructure, and payment solutions. These efforts could help diversify the company’s business model beyond purely issuing stablecoins.
Meanwhile, rival stablecoin issuers like Circle and Banking Circle will likely benefit from USDT’s absence in Europe, giving them a significant market advantage under MiCA’s new regulatory framework.
Tether’s USDT to Enable Commission-Free Transactions on Tron: Justin Sun Unveils Gas-Free Feature
In related news, the Tron blockchain is set to introduce commission-free transactions for Tether’s USDT, a major development aimed at making stablecoin transfers more affordable for users. The announcement came directly from Tron founder Justin Sun, who stated that the new gas-free feature will be implemented within the next week.
Sun took to X on Feb. 25 to confirm that Tron’s Gas Free feature will allow users to send USDT without needing TRX for gas fees, significantly reducing transaction costs on the network.
Sun also invited teams and wallet providers that want to integrate this feature to reach out to JustLend DAO, the official decentralized lending platform on Tron, suggesting that the move could have a broader impact on stablecoin adoption.
Tron has long been regarded as one of the most cost-effective blockchains for transferring USDT, particularly in comparison to Ethereum’s ERC-20 standard, which historically suffered from high gas fees.
However, in recent months, Tron’s transaction costs have skyrocketed, leading to frustration among users. Despite its reputation as an affordable stablecoin network, Tron has now become one of the most expensive platforms for USDT transfers.
According to Tether’s GasFeesNow tracking page, TRC-20 USDT transfers currently cost between $3.20 and $6.50 per transaction—a staggering increase from its once low-cost status. In contrast, ERC-20 USDT transactions on Ethereum cost only about $0.40.
Tether’s GasFeesNow page acknowledges the complexities of estimating gas fees on Tron, explaining that TRC-20 USDT transfers require users to have both “energy” and “bandwidth” in their wallets.
This issue has priced out many retail users, who previously favored Tron as their go-to network for fast and affordable stablecoin transfers.
The introduction of gas-free USDT transactions is the culmination of a months-long development effort. Tron had already begun working on gas-free solutions for TRC-20 transactions in mid-2024, but the feature was delayed beyond its originally planned Q4 2024 launch.
The need for a fee-free or subsidized transaction model became apparent as gas costs surged in late 2024. According to Tether’s data, TRC-20 USDT transfer fees peaked above $9 per transaction on Dec. 9, 2024—an all-time high.
The price spike triggered widespread complaints, with users pointing out that Tron was no longer the cheapest option for stablecoin transactions.
While full details on how the Gas Free feature will function have not been disclosed, Sun has hinted at a system that eliminates the need for users to hold TRX when conducting USDT transactions.
This could be achieved through:
Subsidized Gas Fees: Tron’s JustLend DAO or another ecosystem participant could cover the transaction costs on behalf of users.
Alternative Payment Models: Instead of requiring TRX, users could be charged a fraction of USDT to cover operational costs.
Energy Pooling or Staking Mechanisms: Some analysts speculate that Tron may introduce an energy-sharing mechanism, allowing frequent users to bypass the bandwidth-energy requirement.
Regardless of the final implementation, the impact on USDT users—especially in high-volume markets like Asia, Latin America, and Africa—could be significant.
With this initiative, Tron aims to reclaim its dominance as the preferred network for low-cost stablecoin transactions. Historically, Tron’s biggest advantage has been its speed and affordability, which positioned it as the most used blockchain for Tether transactions.
However, the recent spike in fees and competition from alternative blockchains has eroded that advantage.
Ethereum Layer-2 solutions (such as Arbitrum and Optimism) now offer cheaper USDT transfers than TRC-20.
Solana’s high-speed USDT transactions have also gained traction, particularly among traders.
BNB Chain (BSC) remains an affordable alternative with low transaction costs.
By introducing commission-free transactions, Tron is making a calculated move to retain USDT transaction volume and solidify its relevance in the stablecoin sector.
Potential Impact on the Crypto Market
The gas-free feature could have wider implications beyond just Tron’s ecosystem. Some of the key potential outcomes include:
Increased Stablecoin Adoption
Eliminating gas fees lowers the barrier to entry for new users, particularly in emerging markets where every dollar counts.
This could drive higher USDT transaction volumes, benefitting both Tether and Tron.
Competitive Pressure on Other Blockchains
If successful, this move may force Ethereum, Solana, and BNB Chain to introduce similar gas-reduction mechanisms for stablecoins.
Other networks may experiment with subsidized gas or alternative transaction models.
Regulatory Scrutiny
Some regulators may question the sustainability of a gas-free model, especially if subsidized transactions introduce long-term economic concerns.
This could invite additional scrutiny on Tron’s ecosystem.
