Coinbase, one of the leading cryptocurrency exchanges, has announced its plans to discontinue support for certain stablecoins in the European Union by the end of this year. According to a spokesperson for the exchange, Coinbase will delist stablecoins in Europe that do not comply with the EU’s Markets in Crypto-Assets Regulation (MiCA).
MiCA is a regulatory framework that aims to regulate and supervise crypto assets in the EU, with a focus on consumer protection and preventing financial crimes such as market manipulation, money laundering, and terrorist financing. The legislation requires stablecoin issuers to adhere to strict guidelines, including holding sufficient liquid reserves and being supervised by the European Banking Authority.
The part of MiCA legislation that covers stablecoins came into effect in June, with the remaining regulations set to roll out by December. As a result, Coinbase’s compliance with MiCA may lead to the discontinuation of support for Tether’s USDT, the top stablecoin by market cap. However, the second-largest stablecoin, USDC, has already become compliant with the legislation earlier this year.
USDC was co-created by Coinbase and Circle in 2018, with both companies jointly managing the stablecoin through the Centre Consortium until last year. In August, Circle CEO Jeremy Allaire announced that his company would take over all governance and operational responsibilities for USDC to streamline management of the stablecoin. Coinbase also announced its purchase of an equity stake in Circle at that time.
This move by Coinbase to comply with MiCA regulations reflects the exchange’s commitment to regulatory compliance and ensuring a safe and secure trading environment for its users in the EU. As the cryptocurrency industry continues to evolve, regulatory compliance will play a crucial role in shaping the future of stablecoins and other digital assets. Stay tuned for further updates on Coinbase’s compliance efforts and the impact on the stablecoin market.