Coinbase Is Ending USDC Yield in Europe Due to EU’s Crypto Regulatory Framework Coming Into Full Effect

Coinbase users in Europe have expressed frustration over the region’s evolving crypto regulations after the exchange announced it would discontinue its yield program for the stablecoin USD Coin (USDC). The decision, communicated via email to affected users on November 28, is attributed to the European Union’s Markets in Crypto-Assets (MiCA) regulatory framework. The USDC rewards program will end on December 1 for customers in the European Economic Area (EEA), which includes all EU member states as well as Iceland, Norway, and Liechtenstein.

According to the email, users eligible for the program will continue to earn rewards until November 30.

The announcement quickly drew criticism from the crypto community. Paul Berg, CEO of crypto infrastructure provider Sablier, commented sarcastically on X (formerly Twitter), “Very grateful to the EU for protecting me against earning a yield on my USDC holdings on Coinbase.”

MiCA aims to enhance consumer protection and promote financial stability. The framework imposes strict requirements on stablecoin issuers, distinguishing between asset-referenced tokens (backed by multiple assets) and e-money tokens (pegged to a single fiat currency, such as USDC).

Issuers of stablecoins must maintain sufficient reserves to ensure redemption at any time. They are also required to comply with operational and prudential standards, which include robust governance structures and transparent reporting. While these regulations are intended to safeguard the financial system, some provisions have created operational hurdles for crypto firms. One such clause prohibits interest payments or yields on asset-referenced tokens based on the duration of ownership, effectively making yield programs like Coinbase’s USDC rewards incompatible with MiCA.