Coinbase to Delist Non-MiCA-Compliant Stablecoins From Its European Platform

Crypto exchange Coinbase has announced it will remove all stablecoins from its European platform that do not meet the EU MiCA regulations.

Crypto exchange Coinbase (NASDAQ:COIN) has announced the removal of all stablecoins from its European platform that do not meet the EU MiCA (Markets in Crypto-Assets) regulations. This decision comes as part of the EU’s new regulatory approach to cryptocurrencies.

Coinbase has set strict rules for stablecoin issuers and cryptocurrency exchanges operating within the European Economic Area (EEA).

A Coinbase representative stated,

“We are fundamentally a compliant company, and our plan is to discontinue the offering of services to the EEA customers for stablecoins that do not meet MiCA requirements by December 30, 2024.”

The decision is made in response to the EU’s increasing supervision, which has already led to similar actions by other exchanges.

MiCA Requirements Drive Stablecoin Issuer Compliance

The MiCA regulation is expected to be fully adopted by the end of the year. It mandates that all issuers of stablecoins must obtain an e-money license in at least one EU country. This rule came into effect on 30th June for stablecoin issuers.

The regulation aims to enhance the stability and transparency of the market. Several platforms, including Coinbase, OKX, Bitstamp, and Uphold, are aligning with MiCA.

As the world’s largest stablecoin, USDT may face delisting from Coinbase if it fails to acquire the necessary license. Earlier, The Coin Republic reported on speculation within the crypto community regarding Coinbase’s potential move to delist Tether (USDT).

Coinbase to Offer Swaps for Affected Users

To support affected users, Coinbase will enable EEA users to swap their stablecoins for MiCA-compliant assets, such as USDC. Further details on the matter will be announced by Coinbase next month.

Among the first stablecoin issuers to meet all MiCA criteria is Circle, the issuer of USDC. This provides USDC with a strategic advantage to claim a larger share of the European market.

MiCA aims to provide a regulatory framework that fosters a transparent and protective environment for consumers. Stablecoins that comply with MiCA, such as USDC, are likely to experience increased demand as they become the preferred options for users in the EU.

Increased Competition in Stablecoin Market

The emergence of MiCA has created new business opportunities in the stablecoin segment, attracting the attention of several firms. Fintech companies like Revolut and Robinhood are reportedly planning to issue their own stablecoins. Recently, Paypal also ventured into the stablecoin market.

*ROBINHOOD, REVOLUT SAID TO EXPLORE LAUNCHING OWN STABLECOINS: BBG

However, MiCA regulations stipulate that stablecoin issuers must maintain stable reserves, which can be demanding, especially for new market entrants.

Companies planning to issue their own stablecoins will be subject to these rules, including holding at least 60% of reserves in cash and adhering to proper disclosure standards. Ultimately, this guidance may pave the way for more firms to join the space and bolster consumer trust in stablecoin-backed assets.

MiCA's Impact on Crypto Firms in the EEA

While MiCA aims to harmonize crypto regulations across the EU, some experts anticipate that it may lead to a consolidation of crypto firms in the region.

Smaller companies might encounter difficulties in meeting the new compliance standards, potentially driving them out of the market or pushing them to regions with more favorable regulations, such as the Middle East.

Despite this challenge for smaller firms, major financial institutions like Societe Generale are actively preparing their digital asset offerings to align with MiCA.

In a bid to make stablecoins a core part of the European financial ecosystem, Societe Generale has partnered with Bitpanda to launch a euro-pegged stablecoin, EUR CoinVertible (EURCV), as part of its broader strategy. This move reflects the interest of traditional financial institutions in adopting compliant digital assets.

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