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Coinbase vs MiCA: stop USDC rewards
By Davide Grammatica
Coinbase's USDC-related rewards program will be discontinued in the EU in anticipation of the entry into force of MiCa
Coinbase adjusts to MiCA
In anticipation of the entry into force of MiCA (the new European crypto regulation), Coinbase has announced a halt to annuities from its USDC-dedicated rewards program for European users.
The discontinuation will be effective as of December 1, 2024, and instrumental in obtaining the regulatory compliance necessary to continue operating within the European Economic Area (EEA).
The various stablecoin issuers are also busy obtaining the necessary licenses to operate within the EU, but the problems derived from the new rules imposed on these assets will inevitably fall on the entire CeFi sector as well.
The classic “earn” product, offered in various ways by the majority of cex, is likely to be the one most ostracized by the regulations, which will instead require different issuers to change their criteria for maintaining reserves.
The problems of stables in the EU
The community does not seem to have particularly welcomed Coinbase’s announcement, and sees MiCA as a possible new obstacle to the proper development of the industry. In fact, MiCA’s goal is to protect investors, but the prohibition on obtaining returns from one’s assets is naturally viewed unfavorably.
Europe “protecting” its citizens by ensuring they can’t earn yield on their stablecoins via @coinbase 🤡 pic.twitter.com/ExTiNOjB3j
— 0xLouisT (@0xLouisT) November 28, 2024
However, Coinbase had been prepared for this scenario for some time. As early as last October, the cex announced that it had begun its phase of compliance with EU regulations, instructing users to “switch” to compliant stables, such as USDC and EURC.
The same problems are being experienced by Tether, which has blocked the issuance of EURTs in recent days, citing precisely new regulatory requirements.
