On December 1, 2024, Coinbase will halt its USDC rewards program for users in Europe. The exchange announced the decision in a letter to its clients on November 28.

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

The program allowed users to earn interest on their USDC holdings, with rates varying by jurisdiction.

This decision is tied to new regulations under the Markets in Crypto-Assets (MiCA) framework. Customers in EU countries will continue to accrue rewards until November 30, with payments processed within the first 10 business days of December.

In October, Coinbase had already warned of potential service restrictions for users in the EEA due to MiCA requirements.

Circle, Coinbase’s partner and co-issuer of USDC, has secured an Electronic Money Institution (EMI) license from France’s ACPR regulator, allowing it to issue EURC and USDC across the EU.

On November 27, Tether announced it would discontinue support for its euro-pegged stablecoin EURT, citing low demand and stringent regulations.

Tether CEO Paolo Ardoino criticized MiCA’s requirements, warning they could pose “systemic risks” to stablecoins and the broader banking system. He highlighted concerns about the mandate to hold 60% of reserves in uninsured EU accounts, calling it “a poor idea” that might lead to financial institution failures.

Tether is also backing Quantoz, a project that launched MiCA-compliant stablecoins EURQ and USDQ on the Ethereum blockchain.

Several major exchanges, including Binance, Kraken, and OKX, have similarly alerted their EU customers to potential disruptions in stablecoin services due to MiCA regulations.