EU Central Banks Push for Stablecoin Yield Ban

The European Central Bank and national central banks of EU member states have urged Brussels to ban stablecoin holders from earning returns, arguing that payment tokens should not function like interest-bearing bank deposits.

In a 57-page response as part of the review of the Markets in Crypto-Assets Regulation (MiCA), the European System of Central Banks called for an extension of the yield ban beyond MiCA, covering both direct and indirect forms of remuneration. They also proposed a framework that separates agency services, investment services, and banking-type activities.

The ESCB warned that allowing stablecoin holders to earn returns could undermine the legal distinction between electronic money and bank deposits and distort competition across the EU financial system.