The EU banned USDT because the EU Crypto-Asset Market Regulation <MICA> was fully implemented on December 30. MICA is a bill for the regulation of stablecoins, and the ban on USDT is mainly because Tether has not obtained a compliance license. Currently, Tether's competitor Circle has obtained regulatory approval and is the world's first stablecoin issuer that complies with MiCA, so the EU uses USDC and EURC.
The ban on USDT actually has little impact. In the past few years, USDT has been cracked down on or fined many times in various countries and regions, but it is still the largest stablecoin in the crypto field, with a market value of 138.57 billion US dollars. Given Tether's current size and status, an EU MiCA cannot cause USDT to collapse. As for the stablecoin license in the EU, Tether's latest news is that it is actively preparing to obtain EU approval, which means that this ban may only be temporary.
I think what can really cause USDT to collapse is the lack of its own liquidity, which is more terrifying. Stablecoin regulation is something that countries around the world must do, so there will definitely be more and more measures on stablecoin regulation in the future. For example, in the United States, there are no regulatory agencies and compliance reviews, and large investment institutions dare not participate in the cryptocurrency market. This is a good thing.