The European Union’s Markets in Crypto-Assets ( MiCA ) laws are forcing the exchange to shut down its USDC rewards program.
This change affects the European Economic Area (EEA), a group of 30 countries that includes all EU member states, Iceland, Norway, and Liechtenstein.
What’s Changing?
On November 28th, Coinbase informed users via email that the USDC yield program would officially end on December 1st due to MiCA regulations. Users in the EEA can still earn rewards until November 30th, but after that, the program is gone for good.
MiCA laws, which were introduced in June 2023, aim to tighten the rules for crypto firms and stablecoin issuers. One of these rules prohibits offering interest on stablecoins like USDC, also called “e-money tokens.” This is part of a broader effort to regulate the crypto industry in the region.
MICA is kicking in -> Sunsetting USDC Rewards in the EU Due to MiCA @coinbase @circle pic.twitter.com/8GCGlpt8Xd
— Marina Markezic (@MarinaMarkezic) November 28, 2024
Not everyone is happy about these changes. Some Coinbase users and crypto leaders are voicing their frustrations online.
Why Does It Matter?
For many users, the USDC rewards program was a simple way to earn a little extra from their stablecoin holdings. With this program gone, some feel like they’re left high and dry, unable to make the most of their crypto assets.
Coinbase restricting stable coin trade in Europe in anticipation for Mica regulations. and are ending USDC yields program Dec 1st. $LCX is already regulated in terms of Mica and is positioned for major growth. Bullish pic.twitter.com/V8Moc2CuDu
— Gdawg (@nunsuseguns) November 29, 2024
For Coinbase and Circle, the issuer of USDC, staying in the EU means they must fully comply with MiCA rules by December 30. While these regulations aim to protect consumers, they also raise questions about whether they’re stifling innovation or limiting user benefits.
The Bigger Picture
The MiCA rules are a double-edged sword. On one hand, they provide much-needed clarity and safety for the crypto market . On the other hand, they leave some consumers wondering if they’re losing out on valuable opportunities.
Disclaimer
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