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

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.