Key facts
- Over 50,000 Europeans have called on the EU Commission to ease stablecoin reward restrictions.
- The campaign is part of the review of the Markets in Crypto-Assets (MiCA) framework.
- Stand With Crypto EU argues current rules disadvantage stablecoins compared to bank deposits.
- European central banks are pushing for broader changes to MiCA's stablecoin rules.
- The European System of Central Banks proposed extending interest prohibitions to yield-generating activities.
- Central banks also suggested replacing reserve deposit requirements with liquidity thresholds for stablecoin issuers.
More than 50,000 Europeans have urged the European Commission to loosen restrictions on stablecoin rewards as part of the ongoing review of the bloc’s Markets in Crypto-Assets (MiCA) framework. The campaign, spearheaded by crypto advocacy group Stand With Crypto EU, aims to allow regulated stablecoin providers to offer incentives such as cashback and loyalty benefits, arguing that current prohibitions disadvantage stablecoins compared to bank deposits and other e-money products.
Stand With Crypto EU stated that its campaign generated significantly more responses than previous consultations, including the European Central Bank’s (ECB) digital euro consultation and the Commission’s own 2020 consultation on crypto rules. Harry Pearce Gould, general manager of Stand With Crypto EU, emphasized the need for Europe to compete with the US, which he noted has backed stablecoins as a settlement layer for tokenization. He believes that strong euro-denominated stablecoins are crucial for the euro’s global standing and the EU’s payment sovereignty.
Concurrently, European central banks are also advocating for broader modifications to MiCA’s stablecoin regulations. In a response to the Commission’s review, the European System of Central Banks (ESCB) proposed extending the existing prohibition on stablecoin interest to all lending, borrowing, and staking arrangements that generate yield. The ESCB also suggested replacing MiCA’s requirement for stablecoin issuers to hold a minimum share of reserves in bank deposits with liquidity thresholds, citing concerns that rapid deposit withdrawals during a stablecoin run could strain lenders. The ECB has previously raised concerns about stablecoins’ potential impact on financial stability, including risks to bank lending and monetary policy transmission.