ECB Demands Stricter EU Crypto Rules, Targets Stablecoin Interest Payments

The European Central Bank (ECB) has called for tougher rules on cryptocurrencies in Europe, including stablecoins, staking, and crypto firms. In a response to the European Commission's review of the Markets in Crypto-Assets Regulation (MiCA), the ECB argues that current regulations are not strict enough.

The ECB wants to prohibit interest payments on stablecoins, which are designed to hold a steady value by tracking the US dollar. However, some exchanges have found workarounds by offering crypto lending, borrowing, and staking services, thereby replicating the economic effect of interest payments through ancillary or unregulated services.

The central banks also want to extend the ban on stablecoin interest payments to indirect rewards, such as loyalty-programme benefits. They argue that this is a 'clear legislative priority.'