Coinbase May Delist USDT Stablecoin and Others That Don’t Comply With MiCA Regulations

Top US cryptocurrency exchange Coinbase announced that it could delist cryptocurrencies that have not complied with the Markets in Crypto-Asset Regulations (MiCA), including Tether's USDT stablecoin.

Major US cryptocurrency exchange Coinbase has announced that it may delist cryptocurrencies that have not complied with the Markets in Crypto-Asset Regulations (MiCA), including Tether's USDT stablecoin.

Coinbase's warning comes as the enforcement deadline approaches for the most significant crypto regulations. According to a report, Coinbase Europe, Coinbase Germany, and Coinbase Custody International will stop supporting a total of six stablecoins by December 13.

E-money Authorization Requirement

According to the crypto exchange, this move aligns with MiCA's e-money authorization requirements, which dictate that stablecoin issuers must have regulatory approval in at least one EU member state. Thus, Coinbase has urged users to convert their holdings in non-compliant coins into alternatives such as USD Coin (USDC), which complies with MiCA standards.

ICYMI: As of today, @coinbase is notifying European users of the restriction of stablecoins that don’t meet MiCA requirements 🇪UOn #Algorand, two options are fully MiCAR-compliant and can be legally used in the EEA by 450 million people:1️⃣ $USDCa from @circle #Algorand is… pic.twitter.com/iPULEjjFjP

MiCA is the EU's landmark cryptocurrency regulation. It seeks to standardize the industry and protect users. Its provisions on stablecoins have been in effect since June 30, while the full implementation for exchanges and other companies is set for December 31.

Tether, the world's largest stablecoin issuer with a market cap of nearly $140 billion, has yet to gain the necessary authorization to operate in Europe, according to a recent report by Bloomberg. Other exchanges like OKX and Bitstamp have already restricted access to Tether's USDT in anticipation of the regulation.

Support for Euro-pegged Stablecoins

Even as other assets face delisting, Coinbase has also reaffirmed its support for EURC, a euro-peged stablecoin jointly operated with Circle. These coins comply with MiCA, offering users a secure alternative amidst the regulatory changes.

The implementation of the MiCA regulations has also pushed some exchanges and digital asset issuers to reevaluate their strategies. For instance, Robinhood and Revolut are reportedly considering launching their stablecoins. Coinbase plans to provide an update next month about further actions and options for users to navigate these changes.

Interestingly, Coinbase also disclosed last month that it will suspend USDC rewards for holders in the European Economic Area, a move also aimed at MiCA compliance. The program enables users to earn yields for holding USDC on the exchange. It was reportedly available in several regions, with yields varying per region.