Coinbase Cuts Ties with USDC Rewards in EEA Over MiCA Rules

Coinbase has announced that it will end USDC rewards for
holders in the European Economic Area (EEA) starting December 1. This decision
is in response to the new Markets in Crypto-Assets (MiCA) regulation, the
exchange stated in a November 28 email to customers.

Coinbase USDC Rewards End

Qualified users will continue earning USDC rewards until
Nov. 30. The final rewards will be distributed within the first 10 business
days of December.

Coinbase’s rewards program allowed users to earn daily
yields for holding USDC on the platform. The program was available in over 100
jurisdictions, with the annual percentage yield varying by region due to local
economic and regulatory factors.

Coinbase Delists Non-Compliant Stablecoins

MiCA, effective from June 2023, brings new compliance
requirements for e-money tokens like USDC. Starting June 30, 2024, issuers must
be licensed as credit or electronic money institutions.

These entities must meet strict standards, including reserve
management and liquidity requirements. Additionally, e-money token issuers are
prohibited from offering interest, ensuring stability without being classified
as financial instruments.

MiCA Forces Coinbase Stablecoin Changes

Coinbase
will remove certain stablecoins from its platform in the European Economic Area
(EEA) by the end of the year, citing upcoming regulatory changes, as reported
by Finance Magnates. The
decision is in response to the European Union’s Markets in Crypto-Assets (MiCA)
regulation, which takes full effect in December 2024.

🚨BREAKING NEWS:Coinbase is set to remove non-compliant stablecoins from its platform in the EU this December!On the other hand, Ripple’s stablecoin, ‘RLUSD’, is fully compliant with MiCA regulations and is expected to launch this year!Get ready, because ‘RLUSD’ is poised… pic.twitter.com/OLcSUflRow

— Brett (@Brett_Crypto_X) October 4, 2024

MiCA introduces new requirements for stablecoin issuers,
including transparency, liquidity, and consumer protection standards.

Coinbase
has stated that affected EEA customers will have the option to switch to
stablecoins issued by authorized firms, such as Circle’s USDC and EURC, which
are pegged to the US dollar and euro, respectively. The use of stablecoins has grown notably, with companies
like PayPal integrating them into their services.

This article was written by Tareq Sikder at www.financemagnates.com.