Europeans Urge Commission to Ease Stablecoin Rewards Restrictions

More than 50,000 Europeans have called on the European Commission to relax restrictions on stablecoin rewards as part of its review of the bloc's Markets in Crypto-Assets (MiCA) framework. The campaign was led by crypto advocacy group Stand With Crypto EU, which pushed for regulated stablecoin providers to be allowed to offer incentives including cashback, loyalty benefits, and fee reductions.

The Commission closed its MiCA review consultation on Wednesday, and the campaign generated more than six times the 8,221 responses submitted to the European Central Bank's (ECB) digital euro consultation. Stand With Crypto EU argued that the current prohibition on stablecoin interest puts these products at a disadvantage compared to bank deposits and other e-money products.

Stand With Crypto EU general manager Harry Pearce Gould said that allowing rewards could help euro-denominated stablecoins gain adoption and compete with dollar stablecoins, which are currently dominant in the market. He pointed out that the US has chosen to back stablecoins as the settlement layer for tokenization, and Europe should consider competing with this model.

European central banks have also been pushing for changes to MiCA's treatment of stablecoins. In a response to the Commission's review, the European System of Central Banks (ESCB) called for the existing prohibition on stablecoin interest to extend to lending, borrowing, and staking arrangements that generate yield.