Coinbase prepares to delist Tether’s USDT stablecoin in Europe

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As a seasoned analyst with over two decades of experience in the financial industry, I’ve seen my fair share of regulatory changes and their impact on various markets. The recent decision by Coinbase and other European cryptocurrency exchanges to delist noncompliant stablecoins is a clear indication that the crypto space is maturing and moving towards greater regulation – a trend that I believe is essential for long-term growth and stability.

European cryptocurrency platforms are planning to remove stablecoins that don’t comply with local regulations, as the enforcement date for European crypto rules draws closer.

On December 13th, as per information provided by Coinbase to CryptoMoon on Thursday, Coinbase Europe, Coinbase Germany, and Coinbase Custody International will no longer support Tether’s USDt (USDT) and five other stablecoins.

According to the most recent updates, it appears that we will need to impose service limitations on these digital currencies: USDT, PAX, PYUSD, GUSD, GYEN, and DAI. These specific cryptocurrencies are being restricted due to regulations set by Europe’s Markets in Crypto-Assets (MiCA).

Coinbase plans to keep working with USD Coin (USDC), a stablecoin tied to the U.S. dollar, as well as EURC (EURC), a stablecoin linked to the euro that is co-managed by Coinbase and another American cryptocurrency company called Circle.

Potential relistings are on the agenda

Since June 30th, the initial phase of MiCA’s stablecoin regulation has been in effect. However, the comprehensive regulatory structure for Crypto Asset Service Providers (CASPs) will become active as of December 30th.

As a crypto investor, I recently received a notice from Coinbase about their intentions to remove MiCA-restricted stablecoins from their platform by October. To ensure continuity of my investments, they’ve encouraged me to swap my holdings in noncompliant coins with other stablecoins such as USDC.

As a crypto investor, I find it noteworthy that Coinbase, one of the top three global exchanges by trading volume, hosts a substantial portion of Tether (USDT) trades on its platform.

As per information from CoinGecko, Tether’s USDT ranks as the second most traded asset on Coinbase following Bitcoin (BTC). It represents over 12% of all transactions on the platform, and daily trading volumes surpass $1 billion.

As an analyst at Coinbase, I consistently evaluate the digital assets we offer to our customers to guarantee compliance with regulatory standards. Once stablecoins have achieved compliance with the Markets in Crypto-Assets (MiCA) framework, we will reconsider enabling those services at a later time.

The representative declined to comment about USDT volumes on the affected platforms in Europe.

USDT’s compliance question is a mixed bag

Although Coinbase labels USDT as a “stablecoin subject to MiCA restrictions,” European authorities haven’t explicitly stated that USDT violates the MiCA regulations.

According to the European Securities and Markets Authority, which plays a significant role in ensuring compliance with MiCA regulations, they have not yet declared the legal standing of USDT as they are still engaged in ongoing discussions about this matter.

In simpler terms, Tether’s CEO, Paolo Ardoino, publicly voiced his concerns about certain parts of the MiCA regulations. He also shared that Tether is developing a tech-focused solution specifically designed for the European market.

In November, Tether formally declared a pause in the operation of its Euro-backed stablecoin, EURt (EURT), due to community demand. At that point, the total value of EURT on the market represented less than 0.02% of USDT’s market worth.

Tether plans to keep assisting innovative projects launching compliant stablecoins under the MiCA framework, such as EURq and USDq tokens from Quantoz Payments, a Dutch fintech firm.

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2024-12-12 17:22