Coinbase, the major US-based cryptocurrency exchange, has announced the termination of its USDC rewards program across Europe, responding to upcoming regulatory changes under the Markets in Crypto-Assets (MiCA) framework.
The exchange will cease offering USDC rewards to customers in the European Economic Area (EEA) starting December 1, 2024. This decision affects users in all European Union member states, along with Norway, Iceland, and Liechtenstein.
The move comes as MiCA regulations, which took effect in June 2023, classify stablecoins like USDC as electronic money tokens (EMTs). Under these new rules, interest-bearing features are prohibited, and token issuers must maintain adequate reserves to obtain an e-money license in at least one EU member state.
Coinbase informed its European customers about this change via email last Thursday. Users can continue earning rewards on their USDC holdings until November 30, with final payments scheduled within the first ten business days of December.
The announcement has sparked debate within the crypto community. Paul Berg, co-founder of Sablier, criticized the EU's approach, suggesting it hinders consumers from earning yields under the guise of protection. Ripple's CTO David Schwartz also expressed concerns about regulations limiting consumer-friendly services.
This change is part of Coinbase's broader compliance strategy with MiCA regulations. In October, the exchange revealed plans to remove or modify tokens that don't align with MiCA requirements by December 30, 2024. To assist European customers through this transition, Coinbase has developed a plan facilitating the switch to compliant stablecoins such as USDC and EURC.