Popular US crypto exchange Coinbase is ending its USDC rewards program in Europe. This decision has everything to do with the MiCA rules, which will soon be introduced in this region. The stricter regulations are aimed at stablecoins such as USDC.
Termination as of December 1, 2024
Coinbase will discontinue the service for Europeans as of December 1, 2024. This applies to all customers in the European Economic Area (EEA), which in addition to the European Union (EU) also includes Norway, Iceland and Liechtenstein. The decision follows the introduction of the MiCA (Markets in Crypto-Assets) regulations within the EU.
The MiCA rules, introduced in June 2023, classify stablecoins such as USDC as electronic money tokens (EMTs). These regulations prohibit interest-earning functions and state that issuers must maintain sufficient reserves to obtain an e-money license in at least one EU member state.
Impact on customers
Coinbase users received an email last Thursday announcing the termination of the rewards program. Through November 30, customers can still earn rewards on their USDC balance. Final payments will be made within the first ten working days of December.
Although the program was popular among many customers, the announcement was also met with criticism. Paul Berg, co-founder of Sablier, made a sarcastic comment about how the EU is “protecting” consumers from earning returns. Ripple’s CTO David Schwartz also criticized the negative impact of regulations that he said limit “pro-consumer” services.
Preparing for MiCA
Coinbase had already announced in October that it would cancel or modify tokens that do not comply with MiCA regulations. These changes must be fully implemented by December 30, 2024. For European customers, Coinbase offers a transition plan, allowing them to move to compliant stablecoins such as USDC and EURC.
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Source: https://newsbit.nl/coinbase-staakt-usdc-beloningen-in-europa-door-nieuwe-mica-eisen/
