European Central Banks Push for Tougher Stablecoin Yield Rules

The European Central Bank and EU national central banks are pushing for stricter regulations on stablecoin yields. They want lending, borrowing, and staking products that provide indirect yield to stablecoin holders to be covered by the existing ban.

This proposal is part of a review of the Markets in Crypto-Assets Regulation (MiCA) submitted by the European System of Central Banks (ESCB). The ESCB argues that allowing these services could circumvent the direct yield ban and blur the distinction between electronic money and bank deposits.

The central banks also propose changing the reserve requirements for stablecoins. Currently, issuers must hold at least 30% of their reserves in deposits with credit institutions, but this ratio would be replaced with rules based on holding certain portions of reserves in assets maturing within 1-5 business days.