The European Union’s Markets in Crypto-Assets Regulation (MiCA) is tightening its oversight of cryptocurrency firms, prompting exchanges like Coinbase to make significant adjustments to their offerings.
Coinbase to Remove Noncompliant Stablecoins by 2024
On October 4, Bloomberg reported that Coinbase plans to remove stablecoins that fail to comply with MiCA’s rules by the end of 2024. This decision aligns with the EU’s goal to fully implement MiCA, which seeks to enforce stricter control over the digital asset industry.
A Coinbase spokesperson confirmed the company’s focus on regulatory compliance, stating:
“We are committed to ensuring compliance and will restrict services related to stablecoins that do not meet MiCA standards for users in the European Economic Area (EEA) by December 30, 2024.”
Coinbase also plans to offer EEA customers the ability to convert noncompliant stablecoins to MiCA-approved options, such as Circle’s USD Coin (USDC). Circle is among the first stablecoin issuers to meet MiCA’s requirements.
MiCA’s Impact on Stablecoin Issuers
MiCA, which began regulating stablecoin issuers on June 30, requires that all stablecoins available in the EEA hold an e-money license in at least one EU member state. This regulation could impact major tokens like Tether’s USDt (USDT), which may need to leave the Coinbase platform unless it secures the necessary authorization.
Crypto Platforms Race to Comply with MiCA
Coinbase is one of several cryptocurrency exchanges working quickly to meet MiCA’s compliance standards. Competitors like OKX, Bitstamp, and Uphold have already started limiting access to noncompliant stablecoins, including USDT.
With competition growing in the stablecoin market, companies like Robinhood and Revolut are exploring the development of their own stablecoins to compete with industry leaders Tether and Circle.
At the same time, other companies are capitalizing on MiCA’s regulatory clarity. France-based fintech Next Generation and Ireland’s Decta plan to reintroduce a euro-pegged stablecoin, EURT, on the Stellar blockchain, aiming to meet the increasing demand for euro-backed digital assets.
USDC Gains Ground as Demand for Regulated Stablecoins Increases
As MiCA regulations take hold, Circle’s USDC is gaining popularity. In July, just after the EU’s stablecoin rules were enacted, USDC’s trading volume jumped by 48%.
With Coinbase offering conversion options to MiCA-compliant stablecoins like USDC, the exchange could strengthen its position in the European market. This move may make Coinbase a top choice for users seeking digital currencies that meet the EU’s regulatory standards.
