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 businesses and consumers alike. In the rapidly evolving world of cryptocurrencies, it’s no surprise that regulators are trying to keep up, but sometimes the pendulum swings too far.
Users of Coinbase in Europe have expressed disappointment about the crypto regulations in their region, following the announcement that the platform will no longer provide its yield offering on the US dollar-linked stablecoin USDC for some customers.
In an email dated November 28th and shared on X, Coinbase announced that due to the European Union’s Markets in Crypto-Assets (MiCA) regulations affecting stablecoins, they will be ending their USDC rewards program as of December 1st.
The change will affect customers in the European Economic Area (EEA), a 30-nation bloc that includes all 27 EU member states along with Iceland, Norway and Liechtenstein. The email adds that those eligible will still accrue rewards for the next two days until Nov. 30.
Paul Berg, Sablier’s co-founder and CEO, expressed his appreciation towards the EU for shielding him from earning interest on his USDC holdings on Coinbase in a somewhat ironic November 28 post.
In a playful manner, Mikko Ohtamaa, co-founder of Trading Strategy, humorously conveyed, “I feel secure,” in reference to the email he received on X.
As a researcher focusing on the cryptocurrency sector, I’m highlighting an important regulatory development: Crypto entities like Coinbase and USD Coin (USDC) issuer Circle, who are operating within the European Union (EU), will be required to adhere fully to the Markets in Crypto Assets (MiCA) regulations by December 30. This means these firms must align their practices with the new regulatory framework set forth by MiCA.
As an analyst, I’ve been closely examining the new regulations that came into effect in June 2023. These regulations have established comprehensive and stringent guidelines for crypto companies and stablecoin issuers. Notably, they forbid the practice of providing interest on stablecoins, often referred to as “e-money tokens.
David Schwartz, the tech chief of Ripple Labs, found it amusing in his response to Berg’s post that regulations frequently inhibit companies from carrying out actions that are undeniably beneficial for consumers.
As a researcher, I’m noting that Tether, the company behind the US dollar-backed stablecoin, announced on November 27th their decision to discontinue support for their euro-pegged token. This move is attributed to the changing regulatory landscapes pertaining to stablecoins in the European market.
A team of ex-Binance leaders is planning to debut in the market with a stablecoin tied to the Euro, issued by their company Schuman Financial. They announced on November 26 that their EURØP token would become operational within the next fortnight.
CryptoMoon has contacted Coinbase for further comment.
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2024-11-29 08:54