Coinbase, one of the largest cryptocurrency exchanges, has announced that it will stop offering certain stablecoins in the European Union (EU) that do not meet the region’s regulatory standards by the end of this year. The move is in line with Coinbase’s efforts to comply with the EU’s new Markets in Crypto Assets (MiCA) regulations. In a statement shared with CoinDesk, Coinbase confirmed that as of December 30, 2024, it will no longer provide services involving stablecoins that are not authorized under MiCA to users in the European Economic Area (EEA).

This decision is part of Coinbase’s broader strategy to align with MiCA, which mandates that companies dealing with crypto assets must be authorized to operate within at least one EU country. The rules for stablecoins, which came into effect on June 30, 2024, require that stablecoin issuers possess an e-money license in one of the EU’s 27 member states to legally operate across the bloc.

MiCA Compliance and Stablecoins

Several stablecoin issuers have been working to meet these new regulatory requirements, but not all have succeeded. For example, Circle, the second-largest stablecoin issuer, became the first to secure an Electronic Money Institution license in the EU in July 2024. This license allows Circle to offer its stablecoins, such as USDC, within the European Union.

On the other hand, Tether, the largest stablecoin issuer, has yet to obtain an e-money license in the region. Tether has praised the EU’s regulatory framework but has also pointed out some difficulties. A Tether spokesperson mentioned that while they support the EU’s structured approach to regulating crypto assets, some parts of MiCA create added challenges for stablecoin issuers. These complexities could increase risks to both local banks and the stablecoins themselves. To tackle these issues, Tether is working on a technology-driven solution specifically designed for the European market, which will be revealed in the near future.

Coinbase’s Next Steps

In November 2024, Coinbase plans to release further details about its upcoming changes. The company has assured its users in the EEA that they will have options to switch to stablecoins issued by authorized entities. For example, customers may be encouraged to use Circle’s USDC and EURC, which are already compliant with MiCA.

This move is part of a larger trend in the crypto industry, where exchanges and stablecoin issuers are adapting to increasingly strict regulations, particularly in the European Union. By ensuring compliance, Coinbase and others hope to continue operating smoothly in one of the world’s most important financial markets.