Coinbase to Restrict Access to Certain Stablecoins in the EU

Coinbase users in the European Union will lose access to stablecoins that do not comply with the MiCA legislation. This was reported by The Block, citing a statement from the cryptocurrency exchange.

“Given our compliance obligations, we intend to restrict services to users in the [EEA] for stablecoins that do not meet MiCA requirements by December 30, 2024,” the statement reads.

The legislation requires stablecoin issuers to obtain a license from a competent authority of an EU member state and to hold at least 60% of reserves in EU bank accounts.

The issuer of the largest stablecoin, USDT — Tether — has yet to obtain the relevant license, unlike its closest competitor Circle, which, together with Coinbase, backs USDC.

In August, Tether CEO Paolo Ardoino called MiCA a threat to stablecoins and the banking system. He highlighted the vulnerability of such financial institutions, citing the collapse of Silicon Valley Bank, which led to the USDC depeg.

He also emphasized that deposits in the EU are insured up to $100,000. According to the Tether CEO, this is insufficient for large issuers.

The total market capitalization of stablecoins at the time of writing is $173.6 billion, according to CoinGecko. The undisputed leader remains USDT ($119.6 billion), followed by USDC ($35.5 billion) and DAI ($5.8 billion).

In July, the cryptocurrency exchange Uphold ceased support for USDT, DAI, FRAX, GUSD, USDP, and TUSD for users in the EEA to comply with MiCA requirements.

Previously, similar warnings regarding “unregulated stablecoins” were issued to clients of Binance and OKX. Kraken also announced its intention to consider the necessity of delisting USDT in the EU.