How MiCA Regulations Are Changing the Crypto Landscape: Coinbase’s USDC Rewards End
MiCA Regulations – Coinbase has confirmed that it will be discontinuing its USDC Rewards program for customers based in the European Economic Area (EEA) starting December 1, 2024. This decision comes as a result of the newly implemented European Markets in Crypto-Assets (MiCA) regulations, which impose stricter requirements on stablecoins. The announcement, made via an email circulated on X (formerly Twitter), has caused disappointment among many users who were benefiting from the program.
Impact of MiCA Regulations on Stablecoin Yield Programs
The MiCA regulations, which were introduced in June 2023, include a set of rules aimed at increasing the regulatory oversight of crypto firms and stablecoin issuers within the European Union. One of the significant provisions of MiCA is the ban on offering interest or rewards on stablecoin holdings, also referred to as e-money tokens. As a result, Coinbase’s USDC Rewards program, which allowed users to earn yield on their USDC balances, will no longer be available to EEA customers.
Eligible clients will have until November 30, 2024 to accumulate any remaining rewards before the program closes. Coinbase’s decision to shut down this service aligns with MiCA’s compliance deadline of December 30, 2024, by which all crypto firms operating in the EU must adhere to the new regulations.
Crypto Industry Reactions to MiCA’s Stablecoin Regulations
The termination of the USDC Rewards program has sparked criticism within the crypto community. Paul Berg, co-founder and CEO of Sablier, a token streaming protocol, sarcastically expressed his “gratitude” to the European Union for protecting him from earning yield on his USD Coin (USDC) holdings. Similarly, David Schwartz, Ripple Labs’ technology chief, pointed out the irony that regulations, intended to protect consumers, often hinder services that benefit them.
Tether and MiCA Compliance: What’s Next?
This development is part of a broader trend within the crypto market as firms adapt to MiCA regulations. In response to MiCA’s requirements, Coinbase has also announced plans to delist non-compliant stablecoins, including Tether (USDT), by the end of the year. Additionally, Tether revealed plans to phase out its Euro-pegged stablecoin, EURT, by November 2025, citing the need for a more risk-averse regulatory framework. To align with MiCA, Tether is focusing on supporting compliant stablecoins like EURQ and USDQ.
As the MiCA deadline looms, the crypto industry will face significant changes, with more regulatory hurdles for firms to navigate, potentially reshaping the way stablecoins and crypto services are offered in the EU.
Disclaimer: This website’s content is for informational purposes only and does not constitute financial advice, with all cryptocurrency purchases carrying inherent risks.
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