Coinbase Wants to Delist Certain Stablecoins in the EU Because of MiCA

In the EU, the MiCA (Markets in Crypto-Assets) regulatory package has been in effect since the summer , which also affects stablecoins. The crypto exchange Coinbase wants to clean up its offering of Tether (USDT) and co. by the end of the year.

Stablecoins such as Tether (USDT) or USDC form the backbone of the crypto markets. Their use allows many deals to be processed in blockchain networks without having to go through fiat currencies. The MiCA (Markets in Crypto-Assets) rules have been in force in the EU since July, and they also set clear framework conditions for stablecoins in order to protect against less reputable providers.

Why will Coinbase delist some stablecoins in the EU

The MiCA transition periods expire at the end of the year and the US crypto exchange Coinbase is preparing consequences. Coinbase is currently informing customers by email that support for stablecoins that do not meet the MiCA requirements will be discontinued in Europe on December 30th.

A sticking point here is the MiCA rule that issuers of stablecoins based on the US dollar must hold 30 or 60 percent of fiat reserves in EU accounts, depending on the license. USDC, the second largest global stablecoin, has already secured EU approval through a euro version called EURC. Coinbase also refers to this and writes that it will introduce options in November to exchange balances in stablecoins for MiCA-compliant representatives such as USDC and EURC.

The big question mark still hangs over Tether (USDT), the clear market leader among stablecoins with a market capitalization of around 120 billion US dollars. As far as is known, Tether has not yet sought MiCA approval and is therefore no longer available or only partially available to EU customers on crypto exchanges such as Bitstamp, OKX, Kraken or Binance.

However, Tether CEO Paolo Ardonio is currently using X to indicate that he is working on a “new technological solution for the European market” and wants to present it soon. Coinbase has an indirect stake in USDC – but is still likely to be interested in keeping Tether as an alternative in the portfolio in the future.

Conclusion: Stablecoins in the EU – Coinbase is serious

Experts are watching with interest as PayPal’s still young stablecoin PYUSD slowly gains market share. Ripple also wants to launch its own stablecoin called RLUSD, of which a euro version is also likely – but so far the project is in the preparation phase.

Crypto investors residing in the EU must prepare themselves for being limited in their choice of stablecoins by the end of the year at the latest. But it is not yet known which stablecoins Coinbase plans to delist in Europe. Tether seems to be under pressure, as it certainly does not want to miss out on the important EU market.

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(Featured image by CoinWire Japan via Unsplash)

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