Coinbase users in the European Economic Area (EEA) are voicing frustration as the exchange announces the end of its USD Coin (USDC) yield program.
The move comes in response to the European Union’s Markets in Crypto-Assets (MiCA) regulations, which restrict offering interest on stablecoins.
In a notification sent on November 28, Coinbase informed affected users that the USDC rewards program will officially end on December 1. However, eligible customers will continue to accrue rewards until November 30. This change impacts users across the EEA, a 30-country bloc comprising EU member states along with Iceland, Norway, and Liechtenstein.
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 decision has sparked criticism from the crypto community, with many mocking the regulatory framework. Paul Berg, CEO of crypto infrastructure provider Sablier, sarcastically commented 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, ridiculed the decision, stating,
“I feel protected.”
MiCA, which came into effect in June 2023, imposes strict requirements on crypto firms and stablecoin issuers, including a ban on offering interest for stablecoins, classified as “e-money tokens.” Crypto firms operating in the EU, such as Coinbase and USDC issuer Circle, must achieve full compliance by December 30.
David Schwartz, Chief Technology Officer at Ripple Labs, weighed in on the controversy, criticizing the regulations for hindering consumer-friendly initiatives.
“It’s funny how often regulations prevent companies from doing things that are unarguably pro-consumer,”
Schwartz wrote in response to the backlash.
Meanwhile, Coinbase has introduced the Coinbase 50 Index (COIN50), a regulated cryptocurrency benchmark aimed at providing global investors with a transparent and reliable tool to track the growing crypto market. According to the exchange, the index enables traders to monitor the broader cryptocurrency market’s performance and benchmark their returns.
Described as a crypto parallel to traditional market indices, COIN50 is designed to streamline market exposure and offer portfolio assessment tools for investors seeking insights into the market’s overall trajectory.
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