USDT in the EU After Coinbase's Conversion and ESMA's Deadline: A Merchant Guide

04/11/2026

On 30 October 2026, Coinbase converted the remaining balances of 14 stablecoins held by its users in the European Economic Area, including Tether's USDT, into USDC at the market rate. Three weeks earlier, the European Securities and Markets Authority (ESMA) told national regulators to make licensed crypto firms wind down services in non-compliant stablecoins by 8 January 2027. For businesses that take stablecoin payments from European customers, the practical question is no longer theoretical: which stablecoin should you accept, and where will you settle it?

What happened

Coinbase conversion (30 October 2026). Coinbase's EEA business, run by MiCA-authorised Coinbase Luxembourg, stopped supporting stablecoins whose issuers are not authorised under MiCA. Buying, selling and swapping were disabled first; remaining balances of USDT, PYUSD, USD1, DAI, USDS and nine other tokens were then converted to USDC or another supported asset. Coinbase notes the conversion may be taxable in some jurisdictions.
ESMA opinion (8 October 2026). ESMA presumes that any MiCA service involving a non-compliant e-money or asset-referenced token conflicts with a provider's duty to act in clients' best interests. Supervisors should require remediation as soon as possible and no later than about 8 January 2027. Only limited, supervised exit services such as conversion or withdrawal may continue. The opinion names no token, and it is addressed to national regulators rather than directly binding on firms.
Other platforms. Kraken has delisted USDT for EEA trading while still allowing deposits and withdrawals.
USDC gains ground. The European Banking Authority designated USDC a "significant" e-money token on 14 October and takes over its direct supervision on 12 November 2026. According to Kaiko data cited by Forex Crunch, USDC now accounts for 56% of euro-paired stablecoin trading volume, while USDT's total supply is still roughly 2.5 times larger.

None of this makes holding USDT illegal. MiCA regulates the service layer (exchanges, custodians, brokers), not the token itself. But that service layer is exactly where merchants convert, settle and cash out.

What it means for merchants

Off-ramp risk. If your settlement path relies on an EU-licensed exchange or custodian to convert USDT into euros, that path may narrow or close by January 2027.
Customer behaviour shifts. EU customers who bought crypto on Coinbase and other licensed platforms are increasingly holding USDC, not USDT. A checkout that only offers USDT TRC20 will miss part of that audience.
Global customers still use USDT. Outside the EEA, USDT remains the most used stablecoin, especially on TRON. Dropping it entirely can cost you buyers in the UAE, Latin America and other markets.
Compliance questions from partners. Banks, acquirers and auditors may ask which stablecoins you hold on the balance sheet and how you convert them.

What businesses should do now

Accept both USDC and USDT, and show USDC first to customers in the EEA.
Map your settlement route. Check who converts your stablecoins into fiat and whether that provider has announced MiCA-related changes before 8 January 2027.
Limit treasury exposure. Convert incoming USDT promptly instead of holding large balances, and keep records of every conversion for tax purposes.
Review your terms and checkout copy so customers know which networks and tokens you accept.
Watch 12 November and 8 January. EBA supervision of USDC starts on the first date; the ESMA remediation backstop falls on the second.

How PassimPay helps

As a crypto payment processor for online businesses, PassimPay lets merchants accept USDT, USDC and other digital assets through one integration, API, payment links or CMS plugins. You can offer USDT payments to global customers while giving EU buyers a USDC option, and use automatic conversion to reduce exposure to any single token. For euro settlement, the PassimPay on-ramp exchanges EUR to and from USDT and USDC via SEPA. Not sure which stablecoin fits your flows? Our USDC vs USDT comparison for businesses breaks it down, and our managers can review your setup against the countries you serve.

FAQ

Can businesses still accept USDT in the EU? MiCA does not ban holding or receiving USDT. ESMA's opinion targets services offered by licensed crypto firms, so the main risk is that EU platforms you rely on for custody or conversion stop supporting it by 8 January 2027.

Why did Coinbase convert USDT to USDC for European users? Coinbase says it can no longer support stablecoins whose issuers are not authorised under MiCA. Remaining EEA balances of 14 such tokens, including USDT, were converted on 30 October 2026.

Is USDC MiCA-compliant? USDC is issued by MiCA-authorised Circle, and the EBA designated it a significant e-money token on 14 October 2026, with direct EBA supervision from 12 November 2026.

Should my checkout offer USDT or USDC? For most businesses with mixed audiences, both: USDC for EEA customers and regulated counterparties, USDT for global buyers who already hold it.

Sources

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