Tether’s USDT Shrinks as Europe Tightens Rules, Biggest Drop Since 2022
The post Tether’s USDT Shrinks as Europe Tightens Rules, Biggest Drop Since 2022 appeared on BitcoinEthereumNews.com.
Altcoins Tether’s flagship stablecoin is facing its sharpest monthly contraction since the collapse of FTX, signaling a notable liquidity shift across the crypto market. Key Takeaways USDT supply is down about 1.5 billion dollars in February, its biggest monthly drop since 2022. The decline follows MiCA-driven restrictions in Europe and major exchange delistings. USDC is gaining market share as investors de-risk, tightening overall crypto liquidity. As of February 20, 2026, the circulating supply of USDT has dropped by roughly 1.5 billion dollars this month. After peaking near 187 billion dollars in early January, supply has slid below 184 billion as of February 18. The move marks the first negative market cap growth for USDT in two years and a clear break from months of steady expansion. Supply Reversal After Two Years of Growth While the decline is far smaller than the panic-driven selloff during the FTX crisis in late 2022 – when USDT’s market value plunged 5.7 percent in just seven days – the current pullback stands out for different reasons. Instead of a sudden collapse, this contraction appears to be driven by regulatory reshuffling, competitive pressure, and broader market de-risking. Tether has accelerated the process itself. In early February, the company carried out record back-to-back token burns totaling 3.5 billion USDT, following a separate 3 billion burn in January. These reductions have amplified the visible drop in circulating supply. MiCA Forces European Reshuffle Regulatory pressure from Europe is playing a central role. The full implementation of the EU’s Markets in Crypto-Assets framework on December 30, 2025 has significantly altered the stablecoin landscape across the European Economic Area. Under Markets in Crypto-Assets Regulation, issuers must meet strict licensing and reserve standards. Tether has declined to align USDT with those requirements, prompting multiple major exchanges to restrict or remove the token…
Filed under: News - @ February 20, 2026 5:26 pm