As the enforcement deadline for the European Union’s Markets in Crypto-Assets Regulation (MiCA) draws closer, cryptocurrency exchanges like Coinbase are gearing up to delist stablecoins deemed noncompliant with the new rules.
Coinbase to Delist Six Stablecoins
Coinbase Europe, Coinbase Germany, and Coinbase Custody International will delist six stablecoins, including Tether’s USDT, on December 13, 2024. The affected assets also include PAX, PYUSD, GUSD, GYEN, and DAI. A Coinbase spokesperson confirmed that these delistings are necessary to comply with MiCA regulations.
“Based on the latest information, we currently expect we will have to restrict services for these assets,” Coinbase said. Despite the restrictions, Coinbase will continue to support USD Coin (USDC) and the euro-pegged EURC, both operated in partnership with Circle.
MiCA’s first phase, governing stablecoins, has been in effect since June 30, 2024. However, the broader regulatory framework for crypto asset service providers (CASPs) will come into force on December 30. In anticipation of these changes, Coinbase had already warned users in October about potential delistings, encouraging conversions to compliant stablecoins such as USDC.
Impact on Trading Volumes
Coinbase’s delisting decision is significant, given the platform’s high trading volume in Tether’s USDT. Data from CoinGecko reveals that USDT is the second most traded asset on Coinbase, trailing only Bitcoin, and accounts for over 12% of its total trading volume, with daily trades exceeding $1 billion.
A Coinbase representative stated that the company regularly reviews listed assets to ensure regulatory compliance. “We will assess re-enabling services for stablecoins that achieve MiCA compliance at a later date,” the spokesperson added, declining to comment specifically on USDT volumes in Europe.
Tether’s Position and MiCA Challenges
Tether, the issuer of USDT, has expressed dissatisfaction with aspects of the MiCA regulations. CEO Paolo Ardoino criticized the framework, but the company is reportedly working on a technology-based solution tailored for the European market. Tether has also suspended its euro-backed stablecoin, EURt, citing low community interest, and is supporting the development of MiCA-compliant alternatives like EURq and USDq by Quantoz Payments.
Despite the challenges, Tether remains committed to the European market. A company spokesperson criticized some exchanges’ “rushed actions” to delist stablecoins prematurely, attributing it to either self-interest or superficial regulatory analysis. The spokesperson stated, “Tether is confident it will successfully navigate these changes, ensuring that its efforts to drive financial inclusion and innovation continue to thrive.”
While Coinbase refers to USDT as a “MiCA-restricted stablecoin,” European regulators have not explicitly classified the asset as noncompliant. The European Securities and Markets Authority (ESMA), a key supervisor of MiCA compliance, has yet to make a definitive announcement regarding USDT’s legal status.
