ECB Seeks Wider Stablecoin Regs to Snuff Out 'Indirect' Interest Payments
The European Central Bank and national central banks have requested that the EU's regulatory framework for stablecoins be expanded to cover lending, borrowing, and staking.
In a 57-page response to the European Commission's consultation on the MiCA review, the European System of Central Banks argued that the prohibition on paying interest on stablecoins should not be limited to licensed intermediaries.
The central banks claimed that the yield reaches holders indirectly through decentralized finance protocols, such as loyalty program benefits and liquidity mining incentives.
The response also suggested relaxing the reserve rule for stablecoin issuers, proposing a requirement on how quickly reserves can be converted to cash instead of maintaining minimum bank deposit thresholds.