European Coinbase users have voiced frustration over regional crypto regulations following the exchange’s decision to end its yield program for USD Coin (USDC), a dollar-pegged stablecoin, for certain customers.
On Nov. 28, Coinbase informed users via email—later shared by several recipients on X—that it would discontinue the USDC rewards program in the European Economic Area (EEA) starting Dec. 1. The company attributed the change to the European Union’s Markets in Crypto-Assets (MiCA) legislation governing stablecoins.
Customers in the 30-nation EEA bloc, which includes all 27 EU member states as well as Iceland, Norway, and Liechtenstein, will stop earning rewards after Nov. 30, according to the email. Coinbase confirmed that eligible users would continue accruing rewards for two more days before the program ends.
The announcement sparked criticism on social media, with many mocking the EU’s regulatory stance. Paul Berg, co-founder and CEO of crypto infrastructure provider Sablier, wrote sarcastically on X, “Very grateful to the EU for protecting me against earning a yield on my USDC holdings on Coinbase.” Similarly, Mikko Ohtamaa, co-founder of Trading Strategy, shared his discontent with a mocking post that read, “I feel protected.”
Coinbase and Circle, the issuer of USDC, are among the crypto companies navigating compliance with MiCA regulations, which will be fully enforced by Dec. 30, 2023. These rules, effective since June, impose strict oversight on crypto businesses and stablecoin issuers, including a ban on offering interest or yield on stablecoins, referred to as “e-money tokens.”
Ripple Labs’ Chief Technology Officer, David Schwartz, joined the conversation, criticizing regulatory restrictions in a comment on Berg’s post. “It’s funny how often regulations prevent companies from doing things that are unarguably pro-consumer,” he wrote.
In a related development, Tether, the issuer of the USDT stablecoin, announced on Nov. 27 that it would phase out support for its euro-pegged token. The company cited “evolving regulatory frameworks” in the European market as the reason for its decision.
However, not all players are retreating. Schuman Financial, a firm founded by former Binance executives, plans to launch its euro-pegged stablecoin, EURØP, within the next two weeks. The announcement on Nov. 26 signals that some companies see opportunities despite the challenges posed by the EU’s regulatory landscape.
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