European Union’s MiCA Regulation Sparks Stablecoin Delistings on Coinbase Europe
Coinbase Europe has decided to delist several stablecoins, including Tether’s market-leading USDT, to comply with the European Union’s (EU) Markets in Crypto-Assets (MiCA) regulation. This decision aims to ensure regulatory compliance, particularly for stablecoins that do not meet MiCA requirements.
Restrictions and Impacted Stablecoins
According to a recent announcement, Coinbase will restrict retail customers on its Europe and Germany platforms from accessing Paxos Standard Price (PAX), PayPal USD (PYUSD), Gemini Dollar (GUSD), GMO-Z.com’s GYEN, and Maker Protocol’s DAI. Additionally, users will not be able to “hold these assets on our platform” starting December 13.
Tether’s Response and Concerns
A Tether spokesperson expressed disagreement with the rushed actions of exchanges that have chosen to delist stablecoins prematurely, citing concerns about systemic risks added by the new regulations. Tether stated that it is “finalizing its long-term plans for the region, where it remains committed.”
However, Tether acknowledged that it views the evolving regulatory environment positively but has concerns about the underlying systemic risks added by the new regulations.
Criticism and Implications
The criticism by Tether may be seen as directed towards Coinbase’s decision to delist the stablecoins, particularly since USDC, a joint product created by Circle and Coinbase, is affected. The joint announcement between Coinbase and Circle in 2018 raised eyebrows, with some seeing it as a potential conflict of interest.
Circle’s MiCA Compliance
Interestingly, USDC, a major stablecoin issuer, has already secured a MiCA-compliant license this summer, allowing it to operate seamlessly in EU markets. Circle’s efforts to comply with regulations may be seen as an attempt to ensure a smoother transition for users and investors.
Binance and Circle Partnership
Binance, the world’s leading cryptocurrency exchange, has also partnered with Circle to accelerate the adoption of USDC. This move may be an early step towards ensuring compliance with the European Union’s MiCA regulation.
Transparency Concerns
The Consumers’ Research report, published in September, raised concerns about the transparency of Tether’s dollar-backed stablecoin, USDT. The report criticized USDT’s lack of transparency regarding its stablecoin issuer’s U.S. dollar reserves, calling it a “disaster for consumers waiting to happen.” Tether has responded by citing quarterly attestations, daily transparency updates, security measures, and existing relationships with law enforcement, but the report emphasized that no full audit of the dollar reserves backing USDT from a reputable accounting firm was produced.
Conclusion
In conclusion, the EU’s MiCA regulation has forced Coinbase Europe to delist several stablecoins, including Tether’s market-leading USDT, to ensure regulatory compliance. Tether has expressed disagreement with the rushed actions of exchanges, citing concerns about systemic risks added by the new regulations. The decision by Coinbase may be seen as an attempt to maintain a reputation for regulatory compliance, particularly in light of Circle’s successful acquisition of a MiCA-compliant license for USDC.
FAQs
Q: What stablecoins have been delisted by Coinbase Europe?
A: The stablecoins that have been delisted include Paxos Standard Price (PAX), PayPal USD (PYUSD), Gemini Dollar (GUSD), GMO-Z.com’s GYEN, and Maker Protocol’s DAI.
Q: What is the European Union’s MiCA regulation?
A: MiCA (Markets in Crypto-Assets) is a European Union regulation that aims to provide a regulatory framework for digital assets and ensure consumer protection in the crypto market.
Q: What is Tether’s stance on the delisting?
A: Tether has expressed disagreement with the rushed actions of exchanges that have chosen to delist stablecoins prematurely, citing concerns about systemic risks added by the new regulations.
Q: Will Circle’s USDC be affected by the delisting?
A: No, USDC has already secured a MiCA-compliant license this summer, allowing it to operate seamlessly in EU markets.