- Starting December 1, Coinbase will stop offering USDC rewards for EEA users due to the new MiCA regulations.
- EEA users will receive rewards for USDC until November 30, with payments made by December 10, Coinbase confirms.
- MiCA regulation forces Coinbase, Bitstamp, and Tether to overhaul stablecoin services within the European market.
Coinbase announced that it will no longer offer rewards for USDC holders in the EEA effective December 1st due to the impending MiCA regulation. The exchange sent an email to its users on November 28 highlighting the effects of new regulations on stablecoins.
In its statement, Coinbase explained that the move is a result of MiCA categorizing stablecoins as “e-money tokens” which lead to the emergence of new requirements for issuers. Coinbase will discontinue the rewards program for USDC holders in the EEA, however, users will continue to receive yield on their balances until November 30. Any rewards earned will be sent out no later than the first 10 business days of December.
Coinbase’s APY and Compliance
Coinbase’s USDC rewards program has been used in more than 100 jurisdictions of the world. It enables the user to stake USDC to earn daily yields on their deposited amount. The exchange’s APY ranged from the beginning of each year and was based on the user’s geographical location to encourage users holding USDC on the platform.
The move follows several crypto firms that are operating within the EEA to alter their services to conform with the MiCA regulations that are expected to reinforce rule changes on stablecoins. In early October, Coinbase shared its intention to do away with non-compliant stablecoins in its platform in MiCA-compliant regions.
Similarly, Bitstamp and Binance have also followed the same line of action in response to MiCA. Bitstamp announced that it was delisting EURT after the stablecoin did not meet the new guidelines for the regulatory compliance of the token. In the meantime, Binance has actually offered limited services for unregulated stablecoins since June.
Tether’s MiCA Compliance Efforts
Stablecoin issuer Tether has also followed the rules of MiCA. On November 18, the company invested in the Dutch fintech company Quantoz to design stablecoins that are compatible with the MiCA, EURQ and USDQ. Only days after this, on November 27, Tether stated that it would discontinue support for its EURt stablecoin, which is linked to the euro, with the token’s holders able to redeem the token until November 27, 2025.
With the MiCA regulation on the horizon, Coinbase and other companies in the crypto-industry are confronted with the problem of adjusting their offers to the changing requirements of the regulation. These changes will have consequences for the functioning of stablecoins in the European market.
