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Tokens like USDT, created by Tether Holdings, will likely suffer when Coinbase Global delists all unauthorised stablecoins from its EU crypto exchange before the end of the year.
By year's end, the European Union will have completely implemented MiCA, new regulations to regulate the cryptocurrency business.
Per MiCA regulations that went into effect on June 30, stablecoin issuers are now required to possess e-money authorisation in at least one member state.
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Crypto exchanges and other businesses within the bloc will be subject to new regulations beginning on December 31.
When Coinbase announces its intentions next month, users will be able to convert their stablecoins to versions that comply with EU regulations, such as USDC—Circle Internet Financial Ltd.
The world's leading stablecoin issuer, Tether, still needs the authorisation to provide its $120 billion USDT in Europe.
Bitstamp, OKX, and Uphold are among the exchanges that have taken steps to limit European users' access to Tether stablecoins in the days before MiCA's implementation.
A representative from Tether restated the company's previous claim that it is developing a technological solution to distribute its products in the European market.
Other companies are contemplating the introduction of stablecoins, including Robinhood Markets and Revolut.
Several companies, including Robinhood Markets and Revolut, are considering stablecoin launches in the hope that tighter laws in Europe and other regions will eventually cause Tether Holdings to relinquish control of the quickly growing $170 billion digital asset market.
Two of the most valued fintechs, Robinhood and Revolut, have been exploring the possibility of launching their own stablecoins.
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However, they may decide against moving forward with the plan. Many new entrants need more time trying to compete with Tether's USDT.
Nearly $120 billion worth of stablecoins have been exchanged, making up over 63% of the market.
Stablecoins are special tokens that aim to keep their value constant.
According to CoinGecko data, USDC's market capitalization stands at $36 billion, whereas other stablecoins are far smaller.
Coinbase said in light of the firm's dedication to compliance, it plans to limit the services provided to customers in the European Economic Area (EEA) using stablecoins that fail to comply with the MiCA regulations by December 30, 2024.
