Coinbase Global Inc. plans to bring the listing of digital assets on its platform into compliance with European MiCA requirements by the end of 2024. Users from the European Economic Area (EEA) will soon be restricted from accessing certain stablecoins, including USDT.
In 2025, Coinbase users from the EU will no longer be able to access stablecoins whose issuers do not hold a European Electronic Money Institution (EMI) license. As Bloomberg reports, the cryptocurrency exchange’s compliance with MiCA could “hit” Tether’s stablecoins.
According to Coinbase, the cryptocurrency exchange intends to restrict EEA users from providing services related to EU-unlicensed stablecoins on December 30, 2024. Detailed steps regarding the crypto exchange’s upcoming actions will be published within the next month. Specifically, Coinbase will provide users with options to convert assets into EU-compliant stablecoins. For example, USDC from Circle, which received an EMI license from the French Office of Supervision and Dispute Resolution (ACPR) in July this year.
While USDT and USDC occupy dominant positions in the global stablecoin market, the assets owe their popularity to different approaches. For example, USDT has wider distribution and deeper liquidity on crypto exchanges. However, Tether has had transparency issues in the past, which has given Circle the opportunity to take a piece of the market by emphasizing regulatory compliance. For example, the USDC is independently audited on a regular basis, and the asset issuer is transparent about its reserves. You can read more about the differences between USDT and USDC in the report by the team at CryptoProcessing.com.
The regulatory requirements under the MiCA law in the European Union regarding stablecoins will finally come into force at the end of 2024, which will potentially contribute to the development of the local stable coin market.
