Coinbase Might Delist These Stablecoins, Here’s Reason

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As a seasoned researcher who has witnessed the evolution of digital assets and their regulatory landscape, I can’t help but feel a sense of both anticipation and trepidation as the EU Markets in Crypto-Assets (MiCA) regulation starts to take shape. It’s fascinating to observe how these regulations are shaping the future of cryptocurrency exchanges like Coinbase, compelling them to make tough decisions such as delisting noncompliant stablecoins.

To adhere with EU’s Markets in Crypto Assets (MiCA) legislation, U.S.-based cryptocurrency platform Coinbase has signaled its intention to remove certain stablecoins from its offerings. As per a Bloomberg report, these non-compliant stablecoins can still be traded on the exchange within the European Economic Area until the end of this year.

MiCA regulation compels Coinbase to delist stablecoins 

The comprehensive rollout of MiCA is approaching, and the stringent supervision it provides means that Coinbase won’t be able to offer stablecoins on their platform in the near future.

A representative from Coinbase confirmed that this action aligns with their worldwide effort to adhere to regulatory requirements. As of now, they have not disclosed which stablecoin they intend to phase out in the United States.

However, it is worth noting that Tether still needs to comply with MiCA. Paolo Ardoino, the CEO of the USDT issuer, once raised concerns that the newly introduced regulation poses a systemic risk to both stablecoins and the broader banking system. His reservations towards the EU rule have deterred USDT from gaining the required authorization. 

Under the MiCA regulation, it’s required that a minimum of 60% of the reserves backing stablecoins should be kept in bank accounts within the European Union. Ardoino, however, noted that deposits in EU banks are insured for just up to $100,000. In his view, this limit is not sufficient for large stablecoin issuers like Tether. Furthermore, stablecoins offered within the EEA must possess a digital e-money license from at least one member state of the EU.

As a result, it’s expected that Tether (USDT) will no longer be available on the Coinbase platform, instead being superseded by competitors such as Circle’s USD Coin (USDC) and Euro Coin (EURC).

Circle, OKX, Bitstamp comply with MiCA regulation 

On the other hand, Circle was one of the first stablecoin issuers to comply with MiCA’s regulatory requirements. Therefore, affected users in the Coinbase delisting process can convert their assets to authorized stablecoins like Circle’s USDC. 

It’s been announced that OKX, Bitstamp, and Uphold are all taking steps to eliminate stablecoins that don’t comply with regulations from their platforms. If Ripple Labs can secure the necessary compliance for their RLUSD stablecoin, it could potentially carve out a significant market share in the EU.

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2024-10-04 18:20