Coinbase recently made an announcement that they will be ending their USDC yield offerings for customers in the European Economic Area on December 1st, due to the MiCA stablecoin laws in the region. This decision has left many impacted customers disappointed, with reactions pouring in online after receiving the email notification on November 28th.
The European Economic Area consists of 30 nations, including 27 EU member states, Iceland, Norway, and Liechtenstein. Coinbase has allowed eligible clients to continue earning USDC Rewards until November 30th, giving them a short window to accrue rewards for their USDC balances before the program comes to a close.
The MiCA regulations, introduced in June 2023, have imposed strict rules and standards on crypto firms and stablecoin issuers operating in the EU. One of these regulations includes a ban on offering stablecoin interests, also known as “e-money tokens.” Companies are required to comply with these new laws by December 30th, leading to Coinbase’s decision to end USDC Rewards for EEA customers.
Paul Berg, the co-founder and CEO of Sablier, expressed his sarcasm in response to the news, thanking the EU for protecting him from earning yield on USD Coin holdings. David Schwartz from Ripple Labs also commented on the situation, highlighting how regulations often hinder companies from offering beneficial services to customers.
In light of these regulatory changes, Coinbase had previously announced the delisting of non-compliant stablecoins from its European exchange by the end of this year. Tether, one of the stablecoins affected, announced on November 27th that they would be ending support for the Euro-pegged stablecoin EURT until a more risk-averse framework is established. Customers holding EURT balances have until November 27, 2025, to redeem their holdings.
Despite these challenges, Tether revealed plans to invest in Quantoz Payments to support MiCA-compliant stablecoins, EURQ and USDQ. This strategic move aims to ensure compliance with the new regulations while continuing to provide stablecoin services to customers in the EU.
Overall, the crypto industry is facing significant changes and challenges due to evolving regulatory requirements, with companies like Coinbase and Tether adapting their services to comply with the MiCA laws. Customers in the European Economic Area will need to adjust to these shifts in the stablecoin market as the deadline for compliance approaches.
