U.S.-based cryptocurrency exchange Coinbase is set to remove non-compliant stablecoins from its European platform as part of preparations for the European Union's new regulations on crypto-assets (MiCA).

MiCA Compliance and December Deadline

The MiCA framework, effective since June for stablecoin issuers, requires companies to hold e-money authorization in at least one EU member state to operate within the bloc. These rules aim to protect users while promoting innovation within the crypto sector. Coinbase must adhere to additional guidelines starting December 31, with the company announcing it will restrict services related to non-compliant stablecoins by December 30.

Impact on Tether and Other Stablecoins

Tether (USDT), the largest stablecoin by market cap, is one of the most affected by Coinbase’s decision. Tether has yet to obtain an e-money license in the EU, which might lead to the removal of USDT from Coinbase's European platform. Tether CEO Paolo Ardoino has voiced concerns over the impact of stringent cash reserve requirements on both banks and digital assets. While Tether faces potential delisting, other stablecoins like Circle's USDC and EURC are protected from these changes. Circle became the first global stablecoin issuer to receive an Electronic Money Institution (EMI) license in the EU, cementing its position in the region.

Preparing for Regulatory Shifts

Other major exchanges such as Binance and Bitstamp have also started restricting stablecoins that don't meet MiCA's requirements. In June, Bitstamp removed Tether’s EURT stablecoin for non-compliance, setting a possible precedent for the industry-wide shift. Binance is also adjusting its stablecoin offerings to ensure full compliance with the EU’s new rules. As MiCA regulations will apply to crypto service providers starting December 31, Coinbase has already designated Ireland as its hub for MiCA compliance.

Coinbase and other major exchanges are actively preparing for MiCA requirements by delisting non-compliant stablecoins and adjusting their offerings to align with the EU's regulations.