Coinbase ends USDC rewards in EEA due to MiCA compliance.
MiCA bans interest in stablecoins, impacting European crypto operations.
Coinbase has announced the discontinuation of its USDC rewards program for users in the European Economic Area (EEA) starting December 1, 2024. The decision aligns with the European Union’s Markets in Crypto-Assets (MiCA) regulations, which impose stringent rules on stablecoin issuers and crypto platforms.
The USDC rewards program, which has been a popular feature in over 100 countries, allows users to earn daily interest on their USDC holdings. However, MiCA prohibits offering interest on stablecoins, categorized as “e-money tokens,” as part of efforts to enhance market stability, protect consumers, and promote transparency.
Meanwhile, in an email sent to EEA customers on November 28, Coinbase confirmed that users would continue to accrue rewards until November 30. After that, the program will be discontinued for users in the 30-nation bloc, which includes all EU member states along with Iceland, Norway, and Liechtenstein.
The move has sparked criticism from some in the crypto community. Paul Berg, co-founder and CEO of Sablier, sarcastically expressed gratitude to the EU for “protecting” him from earning yield on his USDC holdings. Similarly, Trading Strategy co-founder Mikko Ohtamaa mocked the regulations, while Ripple CTO David Schwartz pointed out how regulations often hinder pro-consumer initiatives.
Coinbase Vs MiCA
Coinbase has reiterated its commitment to complying with local regulations while seeking ways to enhance the user experience. The company has also indicated plans to delist non-compliant stablecoins in MiCA-regulated regions, demonstrating its intent to fully adhere to the framework.
MiCA, which took effect in June 2023, aims to establish a unified legal framework for digital assets across Europe. The regulation has led to significant adjustments in the industry, with Bitstamp delisting Tether’s EURt stablecoin and Binance restricting services involving unregulated tokens.
While the USDC rewards program will remain active outside the EEA, the regulatory shift underscores the challenges and changes facing the crypto industry in Europe.
