50K Europeans Call on EU to Loosen Stablecoin Reward Restrictions

More than 50,000 Europeans have signed a petition urging the European Commission to ease restrictions on stablecoin rewards as part of its review of the bloc's Markets in Crypto-Assets (MiCA) framework.

The campaign by crypto advocacy group Stand With Crypto EU comes amid broader concerns from European central banks over stablecoins' potential impact on financial stability. The group argues that prohibiting issuers and crypto service providers from paying interest on stablecoins puts these products at a disadvantage to bank deposits and other e-money products that can offer benefits to customers.

Stand With Crypto EU is calling for the Commission to allow regulated stablecoin providers to offer incentives such as cashback, loyalty benefits, and fee reductions. The group's general manager, Harry Pearce Gould, pointed out that the US has made a clear choice to back stablecoins as the settlement layer for tokenization, and Europe should compete with this model.

European central banks have also pushed for broader changes to MiCA's treatment of stablecoins, including extending the prohibition on stablecoin interest to lending, borrowing, and staking arrangements that generate yield. The European System of Central Banks (ESCB) has proposed replacing MiCA requirements that stablecoin issuers hold a minimum share of their reserves in bank deposits with liquidity thresholds.