Coinbase Will Restrict European Users From Trading Certain Stablecoins Like Tether Due to MiCA Regulatory Requirements

Starting Dec. 13, Coinbase Europe will delist a basket of stablecoin tokens, including crypto's largest fiat-pegged currency, Tether (USDT).

Coinbase will reportedly begin restricting European users from trading certain stablecoins, including Tether (USDT), on Dec. 13.

The move comes as part of the crypto exchange’s efforts to comply with the regulatory requirements outlined in the European Union’s Markets in Crypto-Assets (MiCA) framework.

According to an email sent to European Coinbase users and seen by crypto.news, the exchange will be “delisting a basket of stablecoin tokens” to adhere to the MiCA rules.

The email states that Tether (USDT), Pax Dollar (PAX), Binance USD (BUSD), Circle USD Coin (USDC), TrueUSD (TUSD), GUSD, GYEN, and Maker (DAI) stablecoins will be affected by the trading prohibition.

However, the email also notes that Coinbase will continue to offer trading support for Circle stablecoins USDC and EURC, which were granted a European stablecoin license — the first of its kind — under the new MiCA laws.

“Coinbase will continue to support trading for USDC and EURC stablecoins, which have obtained regulatory approval in the relevant jurisdictions where Coinbase operates,” the email reads.

“Other stablecoin tokens, including Tether (USDT), will be delisted from Coinbase Europe. These tokens may be relisted at a later date if they achieve MiCA compliance.”

At the time of writing, Tether has yet to publicly address the delisting notice. A request for commentary sent by crypto.news also remained unanswered.

As previously reported by crypto.news, the fate of Tether in the European market has been a subject of discussion for several months, especially as MiCA was set to go into full effect by the end of December.

In past statements, Tether CEO Paolo Ardoino expressed the company’s intention to continue serving European users despite the regulatory landscape. However, specific details regarding this plan have been limited.

It remains to be seen whether Tether will opt to exit the European market by 2025, as suggested by some observers, or if it will pursue other strategies to maintain its presence in the region.

Meanwhile, Ardoino did voice concerns about MiCA potentially putting stablecoins at risk back in August. Notably, the regulatory framework includes provisions that could ban certain types of stablecoins in the future.

“MiCA might have put stablecoins at risk, but it also highlighted the importance of having a clear regulatory framework for digital assets in the EU,” Ardoino said at the time.

“This framework will provide legal certainty for crypto businesses and help to protect consumers. We are now waiting for the European Commission to adopt the final MiCA text and for member states to implement the regulation into national law.”

With a market cap of around $140 billion and a massive circulating supply of the USDT stablecoin, Tether is the largest stablecoin operator by a significant margin.

While the European Union certainly represents a major economic area, it’s also worth noting that a large portion of Tether’s business is concentrated in emerging markets such as Latin America and Southeast Asia.

In other news, the company also managed to pocket billions in record profits throughout the year, which were used to make investments in Bitcoin (BTC), mining facilities, and data centers.

Moreover, Tether’s substantial holdings of U.S. Treasury Bills could potentially position the startup to benefit greatly from American stablecoin policies, especially if we consider the recent developments and increased attention in this domain.

However, Tether has not explicitly announced any specific strategies to bolster its presence within United States borders.