Coinbase announced it will terminate its USDC Rewards program for European Economic Area (EEA) customers on December 1, 2024, aligning with the European Union’s upcoming Markets in Crypto-Assets (MiCA) regulations.
The program allowed users to earn interest on USDC stablecoin holdings but will end as MiCA enforces stricter rules. These regulations, effective December 30, 2024, classify stablecoins as electronic money tokens (EMTs), banning interest-earning features and requiring issuers to maintain robust reserves and secure e-money authorization.
Impacted customers will receive their final USDC rewards payments within the first ten business days of December. Until November 30, users can continue earning rewards.
The announcement has sparked criticism among users and industry leaders. Paul Berg, co-founder of Sablier, sarcastically thanked the EU for “shielding” him from earning rewards on his USDC. Ripple CTO David Schwartz criticized the development, calling it a regulatory barrier to offering “pro-consumer” services.
This change follows Coinbase’s October warning about adjustments to comply with MiCA, including delisting non-compliant tokens. The exchange has committed to guiding users in transitioning to compliant stablecoins like USDC and EURC.
The impact of MiCA has already extended to other issuers. Tether recently announced plans to halt minting euro-backed tokens, citing European regulatory challenges, and will refocus efforts on its asset tokenization platform, Hadron.
As MiCA’s full enforcement approaches, European crypto firms are navigating regulatory shifts that could reshape the stablecoin landscape.
