Coinbase to Remove Non-Compliant Stablecoins from EU Platform by 2025

TLDR

• Coinbase will delist USDT and other non-compliant stablecoins in the EU by end of 2024
• This is due to EU’s Markets in Crypto-Assets (MiCA) regulation requirements
• Stablecoins need an e-money license to operate in the EU under MiCA
• Coinbase will offer conversion options to compliant stablecoins like USDC
• The move may impact traders reliant on USDT, the largest stablecoin by market cap

Coinbase, a major cryptocurrency exchange, has announced plans to delist Tether (USDT) and other stablecoins that do not meet new European Union (EU) regulations by the end of 2024.

This decision comes in response to the EU’s Markets in Crypto-Assets (MiCA) law, which aims to standardize rules for crypto assets across the region.

The MiCA regulation, introduced in 2024, requires stablecoin issuers to obtain an e-money license to operate within the European Economic Area (EEA).

Tether, the company behind USDT, currently does not possess this license. As a result, Coinbase and other exchanges are taking steps to comply with the new rules.

Coinbase stated that it is committed to providing a safe and compliant platform for its European users. The exchange plans to remove non-compliant assets by December 2024.

To help users transition, Coinbase will offer options to convert holdings to compliant stablecoins, such as USD Coin (USDC).

This is not the first time Coinbase has expressed concerns about USDT. In 2022, the exchange recommended that its users swap USDT for USDC, citing transparency issues. However, the recent announcement makes this suggestion official and mandatory for EU users.

The decision to delist USDT and other non-compliant stablecoins will likely have a significant impact on traders. USDT is currently the largest stablecoin by market cap and is widely used in cryptocurrency trading.

Users who rely on USDT will need to either withdraw their holdings or convert them to alternative stablecoins.

This move by Coinbase reflects the growing importance of regulatory compliance in the maturing cryptocurrency market.

As digital assets become more mainstream, exchanges and other crypto businesses are increasingly focusing on safety and adherence to local laws.

The MiCA regulation aims to protect consumers and investors in the crypto space. By requiring stablecoin issuers to obtain e-money licenses, the EU hopes to ensure that these digital assets are backed by sufficient reserves and meet certain financial safeguards.

Coinbase’s decision may lead to temporary liquidity disruptions in the EU crypto market as traders adjust to the new reality. However, it also presents an opportunity for compliant stablecoins like USDC to gain market share in the region.

As of the time of writing, Tether has not commented on Coinbase’s announcement. The company has previously stated that its robust model will allow it to navigate global regulatory changes.

However, unless Tether obtains the necessary licenses to comply with MiCA, it may face similar delistings from other EU-based exchanges.The crypto industry is closely watching these developments, as they may set a precedent for how other regions