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In a bid to comply with EU Markets in Crypto Assets (MiCA) regulation, American cryptocurrency exchange Coinbase has hinted at plans to delist some stablecoins. According to a Bloomberg report, these noncompliant stablecoins will only be available through the exchange in the European Economic Area until the end of this year.
MiCA regulation compels Coinbase to delist stablecoins
The full implementation of MiCA is coming soon, and the regulation's strict oversight will prevent Coinbase from having these stablecoins on its platform.
Vladislav SopovA company spokesperson said that the move is part of Coinbase's global commitment to ensuring regulatory compliance. The U.S.-based trading platform has yet to officially identify a stablecoin it plans to oust.
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.
The MiCA regulation mandates that at least 60% of reserves backing stablecoins must be held in EU bank accounts. Ardoino pointed out that EU cash deposits are insured for only up to $100,000. In his opinion, this amount is inadequate for large stablecoin issuers like Tether. Also, stablecoins available in the EEA must hold an e-money license in at least one EU member state.
Hence, USDT will likely be removed from the Coinbase platform and replaced by rivals like Circle’s USDC and 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.
Gamza KhanzadaevOKX, Bitstamp and Uphold have equally moved to remove noncompliant stablecoins from their platforms. With Ripple Labs pushing for RLUSD stablecoin, it might also gain a fair market share in the EU if it gains the needed compliance.
Vladislav Sopov
Tomiwabold Olajide
Dan Burgin
Alex Dovbnya