- Coinbase is preparing to ax non-compliant stablecoins in the EU.
- Users will be given an opportunity to swap ahead of the move.
- MiCA’s stablecoin regulations impose significant obligations on issuers.
A lot has changed for the crypto industry in the EU over the past year thanks to the approval and phased implementation of the landmark Markets in Crypto-Assets (MiCA) regulatory framework created to make industry players more transparent and accountable.
In June 2024, the part of the framework introducing stablecoin standards came into force, with other features of the framework related to crypto asset service providers, like exchanges, set to go into force at the end of the year. Ahead of this deadline, several exchanges are making changes to their European operations to meet the compliance standards. In the latest instance, Coinbase has unveiled plans to delist non-compliant stablecoins.
Coinbase Ramps up MiCA Readiness Efforts
Coinbase is preparing to ax non-compliant stablecoins in the EU, per a Friday, October 4 report from Bloomberg. According to the report, the exchange will cease support for these non-compliant stablecoins on December 30 before MiCA rules for crypto asset service providers become enforceable on December 31.
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"Given our commitment to compliance, we intend to restrict the provision of services to EEA [European Economic Area] users in connection with stablecoins that do not meet the MiCA requirements by December 30, 2024," a company spokesperson asserted.
The firm noted that it will offer more details of its plans in November 2024, assuring it will furnish users with adequate options to switch to compliant assets.
MiCA’s Stablecoin Requirements
The EU’s MiCA regime outlaws algorithmic and decentralized stablecoins, requiring liquid 1:1 reserve backing for fiat-backed stablecoins. At the same time, it requires issuers to obtain Electronic Money Institution licenses, which impose significant obligations. These include Anti-Money Laundering (AML) and Know-Your-Customer (KYC) procedures, alongside regular audits.
At the time of writing, only Circle, the issuer of the USDC and EURC stablecoins, has been able to meet the MiCA stablecoin requirements after being the first major issuer to obtain an EMI license in July 2024.
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