- Coinbase has announced the discontinuation of its USDC Rewards program for customers in the EEA region, citing new MiCA regulations
- The program will officially end on December 1, with the final rewards payout expected in early December
- Other stablecoin issuers, like Tether, have also made adjustments to comply with MiCA’s stringent requirements for cryptocurrencies
Coinbase has informed its European Economic Area (EEA) customers that the USDC Rewards program will cease due to compliance with the European Union’s new Markets in Crypto-Assets (MiCA) regulation. An email to customers yesterday revealed that eligible users will continue to earn rewards on USDC balances until November 30, with the final payout distributed within the first ten business days of December. This move follows broader regulatory pressures under MiCA, which have led to similar adjustments by stablecoin issuers such as Tether.
MiCA’s Impact on Stablecoins
The introduction of the MiCA regulation has brought with it stringent new requirements for cryptocurrencies, including stablecoins like USDC and USDT. The regulation imposes detailed obligations, such as ensuring adequate reserves, reporting transparency, and maintaining regulatory approval for certain operations. These requirements can limit the scope of services platforms can offer, as seen with the discontinuation of USDC rewards.
The rules are designed to improve consumer protection, increase transparency, and standardize practices across the EU crypto market. However, they also create additional compliance burdens for issuers and platforms, and it seems that Coinbase has found them insurmountable, as this email to customers this week shows:
Dear Client,
Due to the new European Markets in Crypto-Assets (MiCA) regulation, which introduces new requirements for e-money tokens, Coinbase will be sunsetting the USDC Rewards program for EEA customers.
Users eligible to earn USDC Rewards will continue accruing rewards for USDC balances up until November 30th, with the program sunsetting on December 1st. The final USDC Rewards payout for impacted users will be distributed within the first 10 business days of December.
Coinbase’s decision to shutter the USDC Rewards program in the EEA reflects the challenges associated with adhering to MiCA’s provisions, and they are far from the only entity experiencing such issues.
Tether and Other Issuers Face Similar Challenges
Tether, the issuer of USDT, has been hit perhaps the hardest by MiCA, leading to the company making some significant changes, such as shuttering its EURT stablecoin, while exchanges have been ditching it in favor of more compliant stablecoins such as USDC. USDC issue Circle has itself been taking steps to become compliant, working to meet MiCA’s reserve and reporting requirements.
For crypto platforms operating in the EEA, the regulatory landscape under MiCA presents both opportunities and challenges. On the one hand, the regulation provides a clearer framework for stablecoins and crypto assets, potentially fostering innovation and trust in the sector. On the other hand, it necessitates costly adjustments, often forcing platforms to scale back or modify their offerings.
