Cryptocurrency exchange Coinbase announced the termination of its USDC Rewards program for European Economic Area (EEA) customers from December 1, citing MiCA regulations coming into force.
Reason for Cancellation
Coinbase has informed its clients about ending the USDC Rewards program on December 1 due to the new MiCA regulations concerning stablecoins. These regulations introduce stricter requirements for crypto firms and stablecoin issuers in the EU.
Responses to the News
EEA clients who were earning rewards on USDC balances have shown discontent on social media. Paul Berg, co-founder and CEO of Sablier, sarcastically remarked that he feels 'very grateful to the EU' for protecting him from earning yield. David Schwartz, Ripple Labs technology chief, commented that he finds it ironic how regulations often hinder companies from offering services that genuinely benefit consumers. CITE_W_A: 'It's funny how often regulations prevent companies from doing things that are unarguably pro-consumer,' Schwartz posted.
MiCA Context and Further Changes
MiCA legislation, introduced in June 2023, requires crypto firms and stablecoin issuers to adhere to strict standards and regulations in the EU. MiCA bans the offering of stablecoin interests or what are referred to as 'e-money tokens.' Crypto and stablecoin firms are expected to fully comply with the new MiCA laws by December 30. Previously, Coinbase announced plans to delist non-compliant stablecoins from its European platform by the year's end, one of which is Tether (USDT). On November 27, Tether announced it will end support for its EURT stablecoin but plans to invest in Quantoz Payments to support MiCA-compliant stablecoins EURQ and USDQ.
The changes in the EU stablecoin market are driven by new MiCA regulations. Crypto firms must adapt to these new requirements to continue operating in the region.
