As regulatory conditions tighten in the region, Coinbase will delist all non-compliant stablecoins in the European Economic Area (EEA) by the end of the year.
In their effort to comply with European Union (EU) regulations, several crypto exchanges have already delisted Euro-denominated stablecoins. These actions reflect the broader push for regulatory compliance in the region.
Coinbase to Delist Non-Compliant Stablecoins by December
Coinbase Global’s plans coincide with the European Union’s impending full implementation of the Markets in Crypto Assets (MiCA) framework. Stablecoin regulations under MiCA require issuers to obtain e-money authorization in at least one EU member state.
“Given our commitment to compliance, we intend to restrict the provision of services to EEA users in connection with stablecoins that do not meet the MiCA requirements by December 30, 2024,” a Coinbase spokesperson said in a statement on Friday.
This timeline aligns with expected regulatory guidance for crypto-related firms operating in the bloc, due on December 31. With this date in mind, Coinbase Global committed to providing an update on its plans in November. Specifically, it will issue guidance on how users can convert their stablecoins to EU-compliant versions such as Circle’s USDC.
Read more: What Is Markets in Crypto-Assets (MiCA)?
Circle became one of the EU’s compliant stablecoin issuers after securing an Electronic Money Institution license in July. Jeremy Allaire predicted that the EURC stablecoin could thrive, using its compliance status as a competitive advantage.
“Circle announces that USDC and EURC are now available under new EU stablecoin laws. Circle is the first global stablecoin issuer to be compliant with MiCA. Circle is now natively issuing both USDC and EURC to European customers effective July 1,” Allaire wrote.
The MiCA regulations aim to make firms more accountable and subject them to greater scrutiny. Key focuses will be their risk and compliance management, banking infrastructure, and assurances from major public audit firms. This could inspire increased customer confidence amid improved consumer protection guardrails.
USDT Stablecoin On Path To Regulatory Woes
With the MiCA framework approaching, crypto exchanges have been delisting Euro-denominated stablecoins to comply with new regulations. Bitstamp announced the removal of Euro Tether (EURT) in June, followed by Binance, Kraken, OKX, and Uphold, all shedding EURT to align with MiCA’s rules.
Meanwhile, Tether CEO Paolo Ardoino has resisted MiCA’s requirements, particularly the mandate for 60% of stablecoin backing to be held in bank cash.
“Stablecoins should be able to keep 100% of reserves in treasury bills, rather than exposing themselves to bank failures by keeping big chunks of reserves in uninsured cash deposits. In case of bank failure, securities return to the legitimate owner,” Ardoino wrote.
Read more: Crypto Regulation: What Are the Benefits and Drawbacks?
Tether’s non-compliance places its USDT stablecoin at risk of regulatory challenges, especially as the MiCA grace period for stablecoins draws to a close. If Tether does not adjust its stance, it may face delistings and restrictions, potentially losing market dominance as global regulation tightens.
“Coinbase will potentially delist USDT in the European Economic Area by the end of this year. Europe really does do its absolute best to stifle all forms of innovation,” Layah Heilpern wrote.
Trusted
Disclaimer
In adherence to the Trust Project guidelines, BeInCrypto is committed to unbiased, transparent reporting. This news article aims to provide accurate, timely information. However, readers are advised to verify facts independently and consult with a professional before making any decisions based on this content. Please note that our Terms and Conditions, Privacy Policy, and Disclaimers have been updated.
