ECB Cracks Down on Crypto: Stablecoin Interest Ban and Stricter Staking Rules Ahead

The European Central Bank (ECB) has called for stricter regulations on cryptocurrencies in Europe. In a response to the European Commission's review of the Markets in Crypto-Assets Regulation, known as MiCA, the ECB wants tougher rules on stablecoins, staking, and crypto firms.

MiCA bars both issuers and exchanges from paying interest on stablecoins, but the central banks want this ban extended to indirect rewards such as loyalty-programme benefits. They also argue that authorities should be able to impose a prohibition on issuing new tokens where they pose a threat, including to financial stability.

The ECB's recommendations come after it unveiled its system for settling tokenised assets in central bank money, known as Pontes. The European Commission's consultation on MiCA will close on 30 September, with EU diplomats expecting a revision in 2027 that would need the approval of the European Parliament and member states.