Coinbase Suspends USDC Rewards Program in the EEA Ahead of MiCA Regulations

Very grateful to the EU for protecting me against earning a yield on my USDC holdings on Coinbase

Coinbase has announced that it will be suspending its USDC stablecoin rewards program in the European Economic Area (EEA) on December 1, following the arrival of Markets in Crypto-Assets (MiCA) regulations next month.

Coinbase users in the EEA were notified of the suspension via email on November 28, 2024. The exchange has taken this step to comply with new compliance requirements for stablecoins, which are classified as e-money tokens under MiCA.

Coinbase’s USDC rewards program, which offers daily yields with varying annual percentage yields (APY) based on locations, is available in over 100 jurisdictions globally. However, the EEA suspension will impact users in 30 countries, including France, Germany, Italy, and Spain.

Holders of USDC in the EEA will continue earning yields on their balances until November 30, with accrued rewards to be distributed within the first 10 business days of December.

MiCA, the landmark crypto legislation in the EU, aims to create a standard regulatory framework for crypto assets in the bloc. These new regulations have forced many crypto businesses to reassess their operations.

Earlier in October, Coinbase announced plans to remove all non-compliant stablecoins from its platform in MiCA-regulated regions. Similarly, Bitstamp delisted Tether’s euro-pegged stablecoin EURt, while Binance restricted services involving unregulated stablecoins earlier this year.

On November 27, Tether also confirmed that it will support the discontinuation of EURt, with CEO Paolo Ardoino expressing concerns about potential systemic risks under MiCA.

As the December 30 deadline for MiCA approaches, the European crypto industry is bracing for possible shifts and impacts on their operations.