Leading cryptocurrency exchange Coinbase has declared that it would remove some stablecoins from the list of currencies within the European Economic Area (EEA) by the end of 2024. This action is a reaction to laws that the European Union is about to implement.
The MiCA Regulation’s Implications
The Markets in Crypto-Assets (MiCA) law of the European Union was introduced in early 2023 with the intention of imposing tougher regulations on the cryptocurrency market. All stablecoin issuers—cryptocurrency tokens whose value is linked to stable assets like fiat currency—will have to adhere to strict requirements for consumer safety, transparency, and liquidity by December 2024.
The Compliance Strategy of Coinbase
Coinbase has reiterated its dedication to adhering to legal requirements. The exchange announced via email that by December 30, 2024, it will stop offering services associated with stablecoins that don’t comply with MiCA’s new regulations. This action is considered to be a part of a larger initiative to guarantee adherence to the new regulatory framework of the EU.
Options for Transition for Affected Users
Beginning in November, Coinbase intends to provide transition tools to help affected users in the EEA. These users will have the option to move to authorised issuers’ stablecoins, including Circle’s USDC and EURC, which are correlated with the euro and the US dollar, respectively. It is anticipated that these stablecoins would adhere to the upcoming legal requirements.
Increasing Acceptance of Stablecoins
Recent years have seen a rise in the popularity of stablecoins, particularly when large financial organisations like PayPal start incorporating them into their offerings. Stablecoins have been essential in facilitating the wider adoption of digital assets in mainstream banking, as evidenced by this development.
