50,000 Europeans Urge Brussels to Ease MiCA Stablecoin Rewards Ban

More than 50,000 Europeans wrote to the European Commission asking it to loosen restrictions on stablecoin rewards in its MiCA review, according to the advocacy group Stand With Crypto EU. The consultation closed Wednesday. The group wants regulated stablecoin providers to be allowed to offer cashback, loyalty benefits and fee reductions. A separate petition has gathered more than 126,000 signatures.

Campaign Size vs. Past Consultations

The group says the turnout is over six times the 8,221 responses to the ECB’s digital euro consultation and far above the 198 responses to the Commission’s 2020 crypto consultation.

Why Stablecoin Interest Is Banned

MiCA bars issuers and crypto service providers from paying interest on stablecoins. Stand With Crypto argues this leaves them at a disadvantage against bank deposits and other e-money products. General manager Harry Pearce Gould said the US has chosen to back stablecoins as the settlement layer for tokenisation, and that Europe need not copy it but must compete. He added that rewards could help euro stablecoins rival dollar ones, which matters for the euro’s global standing and the EU’s payment sovereignty.

EU Central Banks Want Tighter Stablecoin Rules

In a Sept. 22 response, the European System of Central Banks asked for the interest ban to cover lending, borrowing and staking arrangements that generate yield. It also proposed replacing the rule that issuers keep a minimum share of reserves in bank deposits with liquidity thresholds, arguing the current rules could strain lenders in a stablecoin run.

ECB Financial Stability Concerns

In June the ECB noted that stablecoins settle around the clock while their reserve assets may follow traditional settlement timelines. In May, Christine Lagarde warned that deposits moving into stablecoins could weaken bank lending and monetary policy transmission, and said Europe should prioritize tokenized infrastructure anchored by central bank money.