ECB Seeks Stricter Crypto Rules Amid Stablecoin Concerns

The European Central Bank (ECB) has released its recommendations for rewriting Europe's crypto rulebook, MiCA. The ECB wants stricter regulations on stablecoins, staking, and crypto firms. According to the ECB, stablecoin issuers should not pay interest, and exchanges should be prohibited from offering indirect rewards.

The central banks also recommend that authorities have stronger tools against tokens pegged to foreign currencies, such as the ability to prohibit new issues or require redemption of existing tokens. They see limited benefit in stablecoins for everyday payments within the EU, given instant bank transfers and the planned digital euro.

The ECB's response feeds into the European Commission's review of MiCA, which has been in effect since December 2024. The last transitional deadline for existing operators expired on July 1, including Binance, the world's largest exchange, to stop serving European customers. The Commission's consultation will close on September 30.