CryptoSlate
Coinbase will automatically convert 14 MiCA-restricted assets held by European Economic Area customers on Oct. 30, including Tether's USDT, PayPal's PYUSD and World Liberty Financial's USD1. Customers have three days to withdraw affected holdings or accept conversion into Circle's USDC, another supported asset or currency. Deposits sent after the cutoff may not be credited or recoverable.
Why it matters
The move follows MiCA requirements for qualifying stablecoin issuers to obtain regulatory authorization. Coinbase said the transitional period expired on July 1, 2026, while an Oct. 8 ESMA opinion instructed authorized crypto firms to stop providing services involving non-compliant stablecoins across trading, custody and transfers.
The restriction list includes DAI, PAX, GUSD, GYEN, BUST, UST, RAI, PAXG, MUSD, USDS and TGBP. Coinbase has already halted purchases, sales and conversions for the affected assets, leaving withdrawals to supported external wallets as the main option for customers seeking to retain them.
Market impact
Automatic conversions at prevailing market rates could strengthen Circle's position in Europe's regulated stablecoin market by redirecting balances from USDT and other restricted assets into USDC. Coinbase has not disclosed the value of affected holdings, so the potential flow remains unclear.
Customers who deposit restricted assets after Oct. 30 risk losing access to trading and transfers. Coinbase said recovery may be available through its unsupported-asset service, depending on the token and network, but it offers no guarantee and charges 5% on recovered assets exceeding $100, plus network fees. Automatic conversions may also create tax obligations in some jurisdictions.
Frequently asked questions
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Which assets will Coinbase restrict for EEA customers?
The list includes USDT, PYUSD, USD1, DAI, PAX, GUSD, GYEN, BUST, UST, RAI, PAXG, MUSD, USDS and TGBP.
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What happens to restricted balances after Oct. 30?
Coinbase will automatically convert eligible balances at prevailing market rates into USDC, another supported asset or currency.
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Can customers deposit USDT after the Coinbase cutoff?
Coinbase warns that affected deposits sent after Oct. 30 may not be credited, traded or transferred, and recovery is not guaranteed.
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Why is Coinbase taking action against these stablecoins?
Coinbase cited MiCA requirements and an ESMA opinion directing authorized crypto firms to stop providing services involving stablecoins that lack the required authorization.
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Could the conversion create costs or tax obligations?
Coinbase's recovery service charges 5% on recovered assets exceeding $100, plus network fees. Automatic conversions may also trigger tax obligations in some jurisdictions.
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