- Coinbase to end USDC rewards in Europe.
- New EU stablecoin regulations are taking effect.
- Earlier, Tether shut down its Euro stablecoin.
More than a year after the European Union introduced the Markets in Crypto-Assets (MiCA) regulations, new stablecoin rules are taking effect. Now, crypto companies are forced to adjust to the new regulatory regime. For most of them, this means shutting down services for European Users.
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Most recently, Coinbase USDC halted its stablecoin rewards program for European users. This decision comes after Tether announced it would shut down its EURT stablecoin.
Coinbase Ends USDC Rewards in the EEA
Crypto companies are shutting down their stablecoin services in Europe. On Friday, November 29, Coinbase announced that it would stop offering USDC rewards to users in the European Economic Area (EEA).
According to Coinbase, European Users will continue to earn daily yields on USDC balanced until November 30. However, the yields will stop on December 1. All yields that were accrued by then will be disbursed to users by December 10.
The exchange blamed new EU regulations for terminating its yield program, which is available in 100 jurisdictions. โUnder MiCA, Coinbase is required to terminate the USDC rewards program for EEA customers,โ Coinbase claimed.
MiCA’s Impact on Stablecoins
European Markets in Crypto-Assets (MiCA) has a special focus on stablecoins, which it calls e-money tokens. It introduces strict rules for reserves, transparency, and investor protection, aiming to reduce the systemic risks of these assets.
The regulation affected the crypto industry broadly, with many companies delisting their stablecoins. For instance, Binance restricted access to unregulated stablecoins in the EEA. Moreover, on Wednesday, November 27, Tether delisted its own EURT stablecoin, which was aimed at European users.
Not all companies reacted the same way, however. Circle, the issuer of USDC, adapted to EU regulations. In September, the company announced it would petition for USDC and EURC to be recognized as official currencies in the EU.
On the Flipside
- Critics of MiCA regulation claim that it stifles innovation, as its rules are too stringent for smaller companies to compete.
- European regulators will have a harder time regulating decentralized stablecoins and DeFi platforms.
Why This Matters
Coinbaseโs decision showcases the effects of the MiCA stablecoin regulation on crypto companies.
Read more about the EUโs crypto regulation:
EUโs MiCA Crypto Regulations: What You Need To Know
Read more about the XT Exchange controversy:
XT Exchange Suspends Withdrawals: Hack, Rug Pull, or Something Else?
