Due to tightening regulatory conditions in the region, Coinbase plans to delist all non-compliant stablecoins in the European Economic Area (EEA) by the end of the year.
Several crypto exchanges have already delisted euro-denominated stablecoins in an effort to comply with European Union regulations. These measures reflect a broader effort to seek regulatory compliance in the region.
Coinbase to delist non-compliant stablecoins by December
Coinbase Global’s plans coincide with the imminent full implementation of the Markets in Crypto Assets (MiCA) framework by the European Union. Stablecoin regulations under MiCA require issuers to obtain electronic money authorization in at least one EU member state.
“In light of our compliance efforts, we plan to restrict the provision of services to EEA users related to stablecoins that do not meet MiCA requirements by December 30, 2024,” a Coinbase spokesperson said in a statement Friday. ”.
This timeline is in line with anticipated regulatory guidance for crypto-related companies operating in the region, scheduled for December 31st. With this date in mind, Coinbase Global has committed to providing an update on its plans in November. Specifically, it plans to issue guidance on how users can convert their stablecoins to EU-compliant versions, such as Circle’s USDC.
Read more: What is the Cryptocurrency Market (MiCA)?
Circle became one of the EU-compliant stablecoin issuers after receiving an e-money institution license in July. Jeremy Allaire predicted that the EURC stablecoin could grow by using its compliance status as a competitive advantage.
“Circle is pleased to announce that USDC and EURC are now available under the EU’s new stablecoin legislation. Circle is the first global stablecoin issuer to be MiCA compliant. We are now issuing both USDC and EURC natively to our European customers starting July 1,” Allaire wrote.
The MiCA regulation aims to make companies more accountable and subject them to greater scrutiny. The main focus is on risk and compliance management, banking infrastructure and assurance from large audit firms. This could increase customer confidence amid stronger consumer protection guardrails.
USDT stablecoin heads down the path to regulatory woes
As the MiCA framework approaches, crypto exchanges are delisting their euro-denominated stablecoins to comply with new regulations. Bitstamp announced the decommissioning of Eurotether (EURT) in June, followed by Binance, Kraken, OKX, and Uphold, which also decommissioned EURT to align with MiCA rules.
Meanwhile, Tether CEO Paolo Ardoino has resisted MiCA’s demands, particularly the requirement that 60% of the stablecoin’s backing be held in bank cash.
“Stablecoins should be able to hold 100% of their reserves in Treasury bills, rather than exposing large reserves to bank failures by keeping them in uninsured cash deposits.Banks should be able to hold 100% of their reserves in Treasury bills. In the event of bankruptcy, the securities revert to their rightful owners,” Ardoino wrote.
Read more: Cryptocurrency regulation: What are the advantages and disadvantages?
Tether’s non-compliance puts the USDT stablecoin at risk of regulatory challenges, especially as the stablecoin’s MiCA grace period is coming to an end. If Tether does not adjust its stance, it could face delisting or restrictions as global regulations tighten, potentially losing market dominance.
“Coinbase could delist USDT in the European Economic Area by the end of this year. Europe is really doing its best to stifle innovation in all its forms,” Raya Heilpern wrote.
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