Cryptocurrency exchanges in Europe are preparing to delist locally noncompliant stablecoins as European crypto regulations near an enforcement deadline.
Coinbase Europe, Coinbase Germany and Coinbase Custody International will delist Tether’s USDt (USDT) and five other stablecoins on Dec. 13, Coinbase told Cointelegraph on Thursday.
“Based on the latest information, we currently expect we will have to restrict services for the following assets: USDT, PAX, PYUSD, GUSD, GYEN, and DAI,” Coinbase said, referring to the coins as assets restricted by Europe’s Markets in Crypto-Assets Regulation (MiCA).
Coinbase will continue supporting USD Coin (USDC) and the euro-pegged EURC (EURC) stablecoin, jointly operated by Coinbase and the US crypto company Circle.
Potential relistings are on the agenda
MiCA’s phase one stablecoin regime has been applicable since June 30, but the full regulatory framework for crypto asset service providers (CASPs) is set to come into force from Dec. 30.
Coinbase previously communicated plans to delist MiCA-restricted stablecoins in October, inviting users to convert their holdings in noncompliant coins into other stablecoins like USDC.
Coinbase’s notification on delisting USDT, PAX, PYUSD, GUSD, GYEN and DAI on Dec. 13. Source: Algorand Foundation
Ranked the third largest global exchange by trading volumes, Coinbase has a significant share of USDT trading on its platform.
According to CoinGecko data, Tether’s USDT is the second largest asset traded on Coinbase after Bitcoin (BTC), accounting for more than 12% of all trades, with at least $1 billion traded daily.
Top five cryptocurrencies traded on Coinbase. Source: CoinGecko
“We regularly review the assets we make available to customers on our platform to ensure we are meeting regulatory requirements, and will assess re-enabling services for stablecoins that achieve MiCA compliance on a later date,” a spokesperson for Coinbase told Cointelegraph.
The representative declined to comment about USDT volumes on the affected platforms in Europe.
USDT’s compliance question is a mixed bag
While Coinbase refers to USDT as a “MiCA-restricted stablecoin,” European regulators have not directly claimed that the stablecoin is not compliant with MiCA.
The European Securities and Markets Authority, one of the key supervisors of MiCA compliance, told Cointelegraph that it was yet to announce the legal status of USDT, with discussions pending.
Tether CEO Paolo Ardoino openly criticized some aspects of MiCA regulations, disclosing that Tether has been working on a technology-based solution tailored for the European market.
In November, Tether officially announced the suspension of its euro-backed stablecoin, EURt (EURT), citing community interest. At the time, EURT’s market cap accounted for as low as 0.02% of the USDT’s market value.
Tether said it will continue to support new projects offering MiCA-compliant stablecoins, including EURq and USDq stablecoins by the Dutch fintech company Quantoz Payments.
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