In a move that could shake up the European crypto scene, Coinbase has announced plans to remove non-compliant stablecoins from its platform in the European Economic Area (EEA) by the end of the year. This decision is part of the exchange’s efforts to comply with the European Union’s new Markets in Crypto-Assets (MiCA) regulations.
MiCA aims to establish a regulated framework for digital assets, ensuring user protection while fostering innovation. The regulations for stablecoins came into effect in June, and broader rules for crypto firms, including centralized exchanges, will be enforced starting on December 31, 2024. Under these rules, stablecoin issuers must secure e-money authorization from at least one EU member state, and Coinbase is taking steps to ensure full compliance.
As part of this transition, Coinbase has urged its users to convert their holdings into MiCA-compliant stablecoins like Circle’s USDC and the Euro-backed EURC. The company has also designated Ireland as its hub for MiCA compliance, ensuring smooth operations across the EU.
The upcoming delisting of Tether’s USDT, the largest stablecoin by market cap, could have a major impact on users. Tether’s CEO, Paolo Ardoino, recently expressed concerns over MiCA’s strict cash reserve requirements, warning of potential risks to both banks and digital assets. While Tether has not yet issued an official response, Coinbase’s strategy follows a pattern seen with other major exchanges like Binance and Bitstamp, which have already begun limiting or delisting non-compliant stablecoins in the region.
What This Means for SWAPD Users
Though SWAPD is relocating to Canada, where crypto regulations are currently less strict, European users relying on Coinbase may soon face challenges when dealing with USDT. At SWAPD, we’ve always recommended against using exchanges for storing your assets, and this latest move from Coinbase is another reason to consider taking control of your crypto. Use this opportunity to invest in a hardware wallet and safeguard your funds, ensuring your assets stay out of regulatory crossfire.
