Revolut Seizes Opportunity as Tether's USDT Faces EU Squeeze

Revolut has launched its own euro-backed stablecoin, EURR, in three European countries as Tether's USDT faces a significant squeeze in the region. The fintech giant began rolling out EURR to customers in Denmark, Poland, and Portugal on August 26, with plans to expand across the European Economic Area later this year.

Tether's decision not to apply for e-money token authorization under the EU's Markets in Crypto Assets regulation has led to its USDT being delisted from every MiCA-licensed exchange in the EEA since July 1. This move was a calculated judgment, as Tether objected to the requirement that 60% of stablecoin reserves be held in EU bank deposits, citing reduced yields and increased counterparty risk.

Revolut's EURR, on the other hand, is designed to maintain a one-to-one peg with the euro and is backed by reserves held and managed by Bridge in accordance with MiCA requirements. The partnership between Revolut and Bridge gives EURR instant access to a massive user base of 80 million people across Europe.

The global stablecoin market has reached $316 billion, with USDT holding 59% market share ($186 billion) and USDC at 23% ($75 billion). However, USDC has overtaken USDT in annual transaction volume, at $18.3 trillion versus $13.3 trillion.