Coinbase users across Europe are expressing frustration over the region’s tightening crypto regulations after the exchange announced it would end its yield offering on USD Coin (USDC) for certain users.
Coinbase Halts USDC Rewards in Europe
In a Nov. 28 email shared by multiple users on social media platform X (formerly Twitter), Coinbase cited the European Union’s Markets in Crypto-Assets (MiCA) regulations as the reason for “sunsetting the USDC rewards program” on Dec. 1. The change will impact users in the European Economic Area (EEA), which includes 27 EU member states as well as Iceland, Norway, and Liechtenstein. Eligible users will continue to earn rewards until Nov. 30.
The move has sparked backlash among crypto enthusiasts. Paul Berg, co-founder and CEO of Sablier, a crypto infrastructure provider, sarcastically remarked, “Very grateful to the EU for protecting me against earning a yield on my USDC holdings on Coinbase.”
Mikko Ohtamaa, co-founder of Trading Strategy, also criticized the decision, writing, “I feel protected,” in a mocking post. Others in the crypto community echoed their sentiments, with Ripple Labs CTO David Schwartz adding, “It’s funny how often regulations prevent companies from doing things that are unarguably pro-consumer.”
MiCA’s Impact on Stablecoins
MiCA, which became law in June 2023, imposes strict regulations on crypto firms and stablecoin issuers operating in the EU. One of the key provisions includes a ban on offering interest or yields on stablecoins, also referred to as “e-money tokens.” Companies like Coinbase and Circle, the issuer of USDC, must fully comply with MiCA by Dec. 30.
The regulatory shift is already reshaping the European crypto landscape. On Nov. 27, Tether announced it would stop supporting its euro-pegged stablecoin, citing the “evolving regulatory frameworks” in the region.
Despite the regulatory crackdown, innovation continues. A group of former Binance executives recently launched Schuman Financial, which announced its own euro-pegged stablecoin, EURØP. The company revealed on Nov. 26 that the token would go live within the next two weeks, signaling a continued interest in stablecoins despite regulatory hurdles.
