EU Stablecoin Review Sparks Tension Between Advocates and Central Banks

A campaign by Stand With Crypto EU to allow regulated stablecoin issuers to offer perks to holders has collected over 50,000 submissions to the European Commission, setting up a direct clash with euro-area central banks.

The group argues that the current ban on paying interest to stablecoin holders puts euro-denominated tokens at a structural disadvantage against bank deposits and electronic money products.

Stand With Crypto EU wants the Commission to use the review of the Markets in Crypto-Assets framework to permit a broader menu of rewards, including cashback, loyalty points, and fee discounts.

The European System of Central Banks has proposed widening the stablecoin interest prohibition to cover lending, borrowing, and staking arrangements that generate yield.