Crypto: Coinbase Forced To Remove Certain Stablecoins, USDT Under Threat?

Coinbase, one of the giants of crypto exchanges, is set to remove non-compliant stablecoins with MiCA regulation from its European platform by the end of December 2024. This decision is part of the company’s efforts to comply with the new regulatory requirements of the European Union for the digital asset sector.

MiCA Compliance, a Challenge for Stablecoin Issuers

The MiCA regulation (Markets in Crypto-Assets), which came into effect on June 30, imposes new strict rules on crypto market participants in Europe. 

For stablecoin issuers, one of the main requirements is to obtain an electronic money license in at least one EU member state. This measure aims to strengthen the stability and security of the crypto market, particularly for stablecoins that play an important role in the ecosystem.

In light of these new requirements, Coinbase has announced its intention to restrict the provision of services to users in the European Economic Area (EEA) concerning stablecoins that do not meet MiCA requirements by December 30, 2024. 

Some major issuers, like Circle with its USD Coin (USDC), have already obtained the necessary authorizations. However, other important actors, such as Tether, have yet to take this regulatory step.

This situation creates considerable pressure on exchange platforms like Coinbase, which must ensure they only offer assets compliant with current legislation.

A Shake-up in the European Crypto Landscape

The announcement from Coinbase marks a significant turning point for the European crypto market. By removing non-compliant stablecoins, the platform could redefine power relations between different issuers.

Users of the European Economic Area (EEA) will thus be offered conversion options to compliant stablecoins, which could encourage massive adoption of tokens like USDC to the detriment of other historical players like USDT.

This decision by Coinbase is part of a broader trend seen among other major sector players. Platforms like OKX, Bitstamp, and Uphold have already taken similar steps to limit access to non-compliant stablecoins. 

This regulatory evolution, while posing challenges, also seems to open up new opportunities in the crypto ecosystem in Europe. We are witnessing the emergence of new stablecoin projects specifically designed for the European market. A significant example is the development of the EURT, a stablecoin pegged to the euro, scheduled to be launched on the Stellar blockchain.