Coinbase to Delist Tether’s USDT Stablecoin in Europe Amid MiCA Regulation Deadline

In a significant move ahead of the full enforcement of Europe’s new crypto regulations, Coinbase has announced it will delist Tether’s USDT (Tether) stablecoin along with five others from its European platforms. The delisting will take effect on December 13, 2024, and applies to Coinbase Europe, Coinbase Germany, and Coinbase Custody International. The affected stablecoins include USDT, PAX, PYUSD, GUSD, GYEN, and DAI.

The delisting is a direct response to the European Union’s Markets in Crypto-Assets Regulation (MiCA), which is set to be fully enforced by December 30, 2024. MiCA’s first phase, which has been in effect since June 30, 2024, already imposed restrictions on certain stablecoins. Coinbase, one of the largest global cryptocurrency exchanges, had previously communicated its intention to delist these noncompliant stablecoins, urging its users to convert their holdings to compliant alternatives such as USD Coin (USDC).

As part of its compliance efforts, Coinbase will continue to support USD Coin (USDC) and the euro-pegged EURC stablecoin, which is operated jointly by Coinbase and the US-based crypto company Circle. Despite this, Coinbase made it clear that it will periodically reassess the situation and may reinstate services for stablecoins that achieve MiCA compliance in the future.

The decision comes as European regulators tighten their oversight of the crypto market. According to a Coinbase spokesperson, the exchange is actively reviewing the assets available to customers to ensure compliance with the latest regulatory requirements. However, the representative declined to comment on the specific volume of USDT trading in Europe or how the delisting would impact the platform’s operations.

USDT’s Compliance Status in Europe Remains Unclear

While Coinbase has described USDT as a "MiCA-restricted stablecoin," the European Securities and Markets Authority (ESMA), a key body overseeing MiCA compliance, has yet to make a definitive ruling on USDT’s status. Discussions surrounding the legal classification of USDT are still ongoing, and ESMA has not directly declared the stablecoin noncompliant with MiCA at this time.

Tether, the issuer of USDT, has expressed its commitment to the European market, despite the regulatory challenges. The company remains focused on supporting the development of MiCA-compliant stablecoins, including the EURq and USDq stablecoins, which are being developed by the Dutch fintech company Quantoz Payments.

A Tether spokesperson emphasized that the company disagrees with the "rushed actions" of exchanges like Coinbase that are preemptively delisting stablecoins, claiming that some may be acting out of self-interest or based on a superficial understanding of MiCA’s requirements. Tether remains confident in its ability to adapt to the new regulations and continue to drive financial inclusion and innovation across Europe, particularly in regions where access to traditional financial services is limited.

A Changing Landscape for Stablecoins in Europe

The upcoming enforcement of MiCA marks a pivotal moment for the crypto industry in Europe. The regulation aims to establish a clear and consistent legal framework for crypto assets and their service providers. As the deadline approaches, exchanges like Coinbase are taking necessary steps to ensure they remain compliant, even if that means delisting certain assets for the time being.

While the fate of USDT and other stablecoins remains uncertain in Europe, the broader trend is clear: the industry is bracing for more stringent regulations and a potential shake-up in the stablecoin market. As regulators continue to assess compliance, exchanges and crypto firms are adapting to ensure they align with the new rules and continue to operate in one of the world’s largest and most influential markets for cryptocurrency.

For now, Coinbase users in Europe are encouraged to convert their holdings in noncompliant stablecoins to USDC or other supported assets, as the industry waits for further clarity on the future of stablecoins in the region.