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In order to comply with the EU’s Market for Cryptocurrency (MiCA) regulations, American cryptocurrency exchange Coinbase has signaled plans to delist some stablecoins. According to a report by Bloomberg, these non-compliant stablecoins will only be available through exchanges in the European Economic Area until the end of this year.
MiCA regulation forces Coinbase to delist stablecoins
Full implementation of MiCA will take place soon, and due to heavy regulatory oversight, Coinbase will no longer be able to hold these stablecoins on its platform.
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A company spokesperson said the move is part of Coinbase’s global efforts to ensure regulatory compliance. The US-based trading platform has not yet officially identified the stablecoins it plans to ban.
However, note that Tether still needs to be MiCA compliant. Paolo Ardoino, CEO of USDT issuer, has previously expressed concern that the newly introduced regulations pose systemic risks to both stablecoins and the broader banking system. His reservations about EU rules are preventing USDT from obtaining the necessary approvals.
The MiCA regulation requires that at least 60% of the reserves backing stablecoins be held in EU bank accounts. Ardoino pointed out that EU cash deposits are only guaranteed up to $100,000. In his opinion, this amount is insufficient for a large stablecoin issuer like Tether. Additionally, stablecoins available in the EEA must hold an e-money license in at least one EU member state.
Therefore, USDT may be removed from the Coinbase platform and replaced with rivals such as Circle’s USDC and EURC.
Circle, OKX and Bitstamp comply with MiCA regulations
Meanwhile, Circle is one of the first stablecoin issuers to comply with MiCA’s regulatory requirements. Therefore, users affected by Coinbase’s delisting process can convert their assets to a licensed stablecoin like Circle’s USDC.
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OKX, Bitstamp, and Uphold have also made similar moves to remove non-compliant stablecoins from their platforms. Ripple Labs is promoting its RLUSD stablecoin and could potentially gain a fair market share in the EU if it obtains the necessary compliance.
