In summary
- Coinbase Europe removed stablecoins such as USDT, GUSD, and DAI to align with the EU’s MiCA regulation.
- Only USDC and EURC will remain available, meeting regulatory requirements.
- Tether raised concerns about systemic risks and questioned hasty decisions by exchanges like Coinbase.
Coinbase Europe decided to withdraw multiple stablecoins, including market-leading Tether’s USDT, to comply with European Union regulations.
In a Wednesday announcement sent to its users, Coinbase wrote that “due to the new European regulation on the Cryptoasset Markets (MiCA) regulation, Coinbase will implement restrictions for stablecoin services that do not comply with MiCA requirements.”
In addition to USDT, retail customers on Coinbase Europe and Coinbase Germany will see the withdrawal of Paxos Standard Price (PAX), PayPal USD (PYUSD), and Gemini Dollar (GUSD). It will also affect GYEN, which its issuer GMO-Z.com calls the first regulated Japanese YEN stablecoin, and Maker Protocol’s DAI.
A Tether spokesperson told Decrypt that, considering the implementation of MiCA, the company “is finalizing its long-term plans for the region, where it remains committed.”
The firm views the evolving regulatory environment positively, but has concerns about the underlying systemic risks that such new regulation is adding, they added.
“Tether takes issue with the hasty actions of a limited number of exchanges that may decide to take an early stance, either out of self-interest, because they own a large share of a competitor or simply had a superficial analysis of the situation,” says the Tether statement.
While the firm did not explicitly point out Coinbase, its statement may be a criticism of the firm’s action. The problem is further exacerbated by USDC being a joint product created by Circle in collaboration with Coinbase in 2018.
The exchange noted that the change may not end up being permanent for all affected assets. Coinbase “will evaluate reinstating services for stablecoins that achieve MiCA compliance at a later date,” it said.
Coinbase noted that USD Coin (USDC) and EUR Coin (EURC) are MiCA compliant and will continue to be supported. For now, the platform suggests that its users sell or convert assets that do not meet the new regulatory requirements before the restriction date or transfer those tokens off the exchange.
Starting December 13, Coinbase Europe users will be restricted from trading and receiving the aforementioned stablecoins and will not be able to “hold these assets on our platform.”
A Coinbase spokesperson told Decrypt that the company aspires to “the highest standards of regulatory compliance and will continue the same with respect to MiCA.”
USDC issuer Circle secured a valid license for MiCA this summer, attracting the attention of exchanges looking for a major stablecoin suitable for EU markets. Earlier this week, Binance, the world’s leading Cryptocurrency exchange, partnered with US-based stablecoin issuer Circle to accelerate the adoption of the USDC stablecoin. That move is also likely an early step to ensure compliance with the European Union’s MiCA regulation.
According to a September report from consumer protection group Consumers’ Research, Tether’s USDT, the world’s leading dollar-backed stablecoin, is characterized by a lack of transparency regarding the stablecoin issuer’s US dollar reserves. The report even stated that USDT is a “disaster for consumers waiting to happen.”
At the time, Tether defended itself against the allegation, pointing to a series of quarterly certifications and daily transparency updates, as well as its existing security measures and relationships with law enforcement. However, as the report noted, there was no full audit of the dollar reserves backing USDT by a reputable accounting firm.
Edited by Stacy Elliott.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
For the Latest Crypto News, Follow ©KeynoteUSA on Twitter Or Google News.
Disclaimer: Please note that the information provided on this page is for News purposes only and should not be considered investment or trading advice. ©Crypto.keynoteusa.com strongly recommends that you conduct independent research and/or consult with a qualified professional before making any investment decisions.
