ECB Raises Deposit Rate to 2.5% While Euro Stablecoins Remain Interest‑Free

The European Central Bank (ECB) increased its key rates by 25 basis points on Thursday, bringing the deposit facility rate to 2.50% effective September 16. Despite the higher rate, euro‑stablecoins remain unable to offer any interest to token holders.

ECB Rate Decision

The ECB raised its deposit facility, main refinancing, and marginal lending rates by 0.25 percentage points. The move reflects persistent inflation pressures, with the bank projecting headline inflation of 3.0% for the current year, 2.5% in 2027 and 2.1% in 2028.

MiCA Restrictions on Euro Stablecoins

Under the EU’s Markets in Crypto‑Assets (MiCA) framework, euro‑stablecoins are classified as e‑money tokens. Article 50 explicitly prohibits issuers and platforms from paying interest or any remuneration linked to the holding period of the token. The rule also covers benefits or discounts tied to token tenure.

Reserve Requirements

MiCA mandates that stablecoin issuers keep at least 30% of the backing assets in bank deposits, with the remainder in highly liquid, low‑risk assets. While these reserves can generate income, the earnings cannot be passed on to token holders.

Impact on EURC

Circle’s EURC, issued under a French e‑money licence since July 2024, has a market value of roughly $466 million. The token’s yield remains zero, mirroring the situation since MiCA’s stablecoin rules took effect in June 2024, when the ECB deposit rate was 3.75%.

Yield Gap

With the ECB’s new deposit rate of 2.50%, the spread between the bank rate and the permitted yield on euro‑stablecoins is now 250 basis points.