The European Union’s Markets in Crypto-Assets Regulation (MiCA) is implementing stricter oversight of crypto-related firms, and cryptocurrency exchange Coinbase is the latest to adjust its offerings in response.
On Oct. 4, Bloomberg reported that Coinbase will remove stablecoins that do not adhere to EU regulations by the end of 2024. This decision is in line with the full implementation of MiCA, which aims to increase control over the digital asset sector.
Coinbase to limit noncompliant stablecoins
In a statement released on Friday, Oct. 4, a Coinbase spokesperson reiterated the company’s commitment to regulatory compliance:
“Given our commitment to compliance, we plan to restrict services to EEA users for stablecoins that do not meet MiCA requirements by December 30, 2024.”
Coinbase also mentioned that users in the European Economic Area (EEA) will have conversion options to compliant stablecoins, such as Circle’s USD Coin (USDC), in the upcoming months. Circle was one of the first stablecoin issuers to comply with MiCA’s regulatory standards.
MiCA, which started regulating stablecoin issuers on June 30, mandates that all stablecoins available in the EEA must hold an e-money license in at least one EU member state.
This regulation directly impacts prominent tokens like Tether’s USDt (USDT), which may need to leave the Coinbase platform if it does not obtain the necessary authorization.
Related: Dutch regulator warns of crypto pump-and-dump risks ahead of MiCA
Race towards compliance
Coinbase is one of several exchanges working to meet MiCA requirements as the European Union gets ready to enforce the regulations. Other crypto platforms like OKX, Bitstamp, and Uphold have already taken steps to limit the availability of noncompliant stablecoins, including USDT.
With competition in the stablecoin market intensifying, companies like Robinhood and Revolut are considering developing their own stablecoins to rival Tether and Circle.
France-based fintech company Next Generation and Ireland-based electronic money institution Decta have announced a plan to reintroduce a euro-pegged stablecoin, EURT, on the Stellar blockchain. They will utilize MiCA’s regulatory clarity to cater to the increasing demand for euro-backed digital assets.
Meanwhile, USDC is seeing a surge in trading volume, especially in response to the rising interest in regulated digital currencies in Europe. In July, just after stablecoin-related regulations took effect in the EU, USDC’s trading volume increased by 48%.
With USDC positioned as a leading MiCA-compliant stablecoin, Coinbase’s intention to offer conversion options could further strengthen its market presence in the region, making it a preferred choice for users looking for approved digital assets.
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