ECB Pushes for Tighter Stablecoin Rules Amid Interest Payment Loopholes

The European Central Bank and EU national central banks have urged Brussels to tighten stablecoin rules. In response to the European Commission's consultation on the MiCA review, they recommended that the ban on stablecoin interest should continue and be extended to crypto lending and staking services.

They argue that these services replicate the economic effect of interest payments through ancillary or unregulated services. The ESCB also proposed a framework to separate agency services, investment services, and banking-type activities for regulated stablecoin issuers.

The central banks further requested that Brussels scrap MiCA's fixed minimum bank-deposit requirements and replace them with liquidity rules tied to how quickly reserve assets can be turned into cash.