Coinbase has announced that all stablecoins that do not meet its regulatory requirements will be delisted in the European Economic Area (EEA) by December 2024. This step coincides with the European Union’s adoption of the Markets in Crypto-Assets (MiCA) regulation intended to strengthen the regulation of the crypto market. The new rules will affect several tokens, including Tether’s USDT.
MiCA Regulations Incoming
MiCA is the European Union’s all-encompassing legislation regarding cryptocurrencies to be fully enforced by 2024. In response, stablecoin issuers must get an e-money license in at least one EU member state. Stablecoins cannot be issued if this approval is not obtained. Some of the provisions of MiCA were enacted on June 30, while the rest will be effective on or from December 31.
As a result of such restraints, Coinbase has declared that it will not support stablecoins that do not meet MiCA’s new requirements after 30th December 2024. Coinbase is going to follow the law to be compliant as a crypto exchange.
Coinbase’s Official Statement
Coinbase confirmed this move on Friday, a spokesperson stated:
Given our commitment to compliance, we intend to restrict services to EEA users for stablecoins that do not meet MiCA requirements by December 30, 2024.
Coinbase plans to provide additional updates in November to guide users through this transition. These updates will allow users to convert their holdings to compliant stablecoins. Circle’s USDC is another stablecoin that already complies with the EU’s regulations on this point.
New Market Competitors
Stablecoins’ upcoming delisting coincides with companies such as Robinhood and Revolut’s impending market entry. These firms aim to compete with Tether, the world’s largest stablecoin issuer, with over $120 billion in assets. Tether’s USDT, nonetheless, has yet to receive approval to run within the European Union.
Binance Lists MiCA-Compliant Eurite (EURI), Offers Zero-Fee PromotionsSome other cryptocurrency exchanges have begun limiting access to Tether’s often-used USDT token. Before MiCA came into force, platforms like OKX, Bitstamp, and Uphold had already imposed restrictions on the token.
While MiCA is expected to affect the way cryptocurrencies work in Europe, Coinbase’s proactive approach could be what other exchanges follow once the new rules come into effect. Further, the move underscores the increasing sway regulation is having over the cryptocurrency industry, especially in Europe. With the new laws, other exchanges would have to follow Coinbase’s lead or wait for the December 2024 deadline.
