Coinbase, a popular cryptocurrency exchange, will be ending its USDC Earn program for users located in MiCA compliant regions. The decision comes as a response to the new regulations surrounding e-money tokens, specifically affecting stablecoins like USD Coin (USDC).
Users in the European Economic Area (EEA) will no longer be able to earn rewards for holding USDC starting on December 1. Coinbase notified its customers via email about this change, citing the upcoming Markets in Crypto-Assets (MiCA) regulation as the driving force behind the decision.
Until November 30, users will still be able to accumulate yield on their USDC balances, with the payouts expected within the first 10 business days of December. This move aligns with Coinbase’s efforts to comply with the new requirements set forth by MiCA to ensure regulatory adherence.
The MiCA rules have led to various adjustments within the cryptocurrency industry in the EEA. Coinbase had previously announced plans to remove any non-compliant stablecoins from its platform in regions where MiCA regulations are in effect. Other exchanges, such as Bitstamp and Binance, have also taken steps to comply with the evolving regulatory landscape.
In a similar vein, stablecoin issuer Tether has been proactive in ensuring regulatory compliance. The company recently invested in a Dutch fintech firm to facilitate the development of MiCA-compliant stablecoins like EURQ and USDQ. Additionally, Tether announced the discontinuation of support for its euro-pegged stablecoin EURt, allowing holders to redeem their tokens until November 27, 2025.
Tether’s CEO expressed the company’s focus on other initiatives until a more stable regulatory framework is established in Europe. The implications of MiCA regulations on stablecoins are significant, with industry players making strategic decisions to navigate the changing regulatory environment effectively.
As the cryptocurrency landscape continues to evolve, regulatory compliance remains a key priority for market participants. The adjustments made by Coinbase, Tether, and other firms reflect the industry’s commitment to adapting to regulatory changes while ensuring the smooth operation of their services for users worldwide.