As MiCA will force exchanges to abandon non-compliant stablecoins in the EU at the turn of the calendar, Coinbase will take necessary action.
Global crypto exchange Coinbase will remove stablecoins from issuers unlicensed in the European Union by December’s end. December 30 marks the date when the bloc’s crypto framework, Markets in Crypto Assets (MiCA), takes full effect.
The news made its way as Bloomberg reported on it on October 4. While MiCA’s implementation has already occurred to some degree, its fullest extent will be felt at the end of this year, and crypto businesses must comply. The stringent and comprehensive framework has exchanges like Coinbase do what they must to remain functional in the EU market.
“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,” Coinbase mentioned. Nevertheless, the firm intends to make it easier for European users by allowing them to switch their stablecoins, if non-compliant, with those that are, like the recently approved USDC.
Circle Has Taken Necessary Steps to Offer Its Stablecoins in the EU
Circle, as USDC’s issuer, received its e-money license in France a few months ago to continue servicing EU users and become the first licensed issuer in the region. The registration occurred in the 11th hour as stablecoin issuers were hit with an injunction by the bloc’s regulators with MiCA’s partial effect on July 1 to stop operating if they do not hold e-money licenses. Circle also brought its Euro-pegged stablecoin, the EURC, alongside the widely popular USDC to the EU.
With the second largest issuer already registered, the largest, Tether, is yet to make a move across the Atlantic, leaving USDT’s dominant position uncertain. Circle’s compliance in Europe saw USDC’s usage spike by 48%. Coinbase will likely switch its European users’ USDT holdings to USDC and other stablecoins if Tether does not take action to receive its license. And that would, by default, make USDC the preferred choice for users.
While Coinbase will eventually delist non-compliant stablecoins, other exchanges have already done so. OKX, Bitstamp, and Uphold have already delisted such assets, including the $120 billion market cap boasting USDT. Simultaneously, numerous firms are rushing to create Euro-pegged stablecoins and receive approval from any of the regulators in the EU’s 27 members. Crypto firms must receive an e-money license from any of these member countries to comply bloc-wide.
