- Coinbase is set to delist stablecoins not compliant with EU MiCA’s rules.
- Stablecoin issuers must get the necessary licenses and be backed by a 1:1 ratio of liquid reserves held in segregated accounts.
- MiCA’s new rules will prevent market manipulation and insider trading.
American cryptocurrency exchange Coinbase reportedly plans to delist some stablecoins from its European platform. Recently, Bloomberg reported that Coinbase would delist stablecoins that were not compliant with the European Union’s regulations.
There is a possibility that Coinbase can delist USDT as Tether is not compliant with the MiCA’s rules. By the end of 2024, stablecoin issuers and other crypto-related firms must comply with the Markets in Crypto-Assets Regulation (MiCA).
Coinbase To Delist Stablecoins Under EU MiCA rules
Coinbase is set to restrict stablecoins in the European Economic Area that do not meet MiCA requirements.
This decision attempts to implement strict rules in the digital asset sector. Also, it will prevent market manipulation, insider trading, and unfair trade practices.
Recently, a representative from Coinbase stated that they are committed to regulatory compliance in the crypto market.
Coinbase has hinted that European Economic Area (EEA) users will get conversion options for compliant stablecoins. Many stablecoins can convert to Circle’s USD Coin USDC in the coming months.
Circle is the first one to be compliant with MiCA’s regulatory requirements. Also, Coinbase’s plans to offer conversion options could further solidify its market presence in the region.
This regulation has affected leading tokens like Tether’s USDT. If Tether does not comply, it will be removed from Coinbase’s European platform.
All crypto-related firms need to comply with MiCA regulations by December 30, 2024, to avoid the de-listing of their stablecoins.
Other Crypto Exchanges On Noncompliant Stablecoins
Other cryptocurrency exchanges have started taking action to comply with MiCA’s regulation. OKX, Bitstamp, Kraken, Binance, and Uphold are the top crypto exchanges working to comply with MiCA regulations.
Binance has announced its plans to delist non-compliant stablecoins. They said that stablecoin issuers should maintain the necessary liquid reserves and obtain the required licenses to comply with MiCA rules.
Kraken is also preparing to delist stablecoins that do not comply with MiCA. The exchange focuses on reporting mechanisms that align with the new regulations. On the other hand, Uphold is shifting towards euro-backed stablecoins to meet the demand in European markets. They are also working on obtaining the necessary e-money license.
MiCA’s Regulatory Requirements
MiCA is a regulatory framework established by the European Union to oversee the crypto-asset space. It is crucial for market integrity, investor protection, and stablecoin regulation.
Many crypto firms must comply with MiCA rules to keep operating in the European market.
Stablecoin issuers must obtain an e-money license in at least one EU member state. Also, their stablecoins must be backed by a 1:1 ratio of liquid reserves held in segregated accounts.
Issuers must provide detailed information about their operations and the mechanisms used to maintain the stable value of the coin. Stablecoin issuers must conduct regular audits to ensure compliance with the regulatory requirements.
USDC has already witnessed a surge in trading in response to the growing demand for regulated stablecoins in Europe. In July, USDC’s trading volume soared by 48%.
Disclaimer
The information in this article is for informational purposes only. It should not be considered financial advice. Cryptocurrency investments are highly volatile. They carry significant risks. Always conduct your own research before making any investment decisions.
Dr. Naveen Singh is an entrepreneur with achievements in sports, academics, healthcare, innovation, blockchain technology, telecommunications, and philanthropy. He is the Co-Founder and Chief Executive Officer (CEO) of Inery, the first layer-1 blockchain programmed for database management. With Inery, he aligns with his vision of a new paradigm for data to empower web3 and complete decentralization.