ECB pushes to broaden stablecoin yield ban under MiCA

The European Central Bank (ECB) and other EU central banks have asked lawmakers to extend the Markets in Crypto‑Assets (MiCA) prohibition on remuneration for stablecoins to include indirect‑return products such as lending, borrowing and staking.

Why the extension is needed

Central banks argue that platforms can currently turn stablecoins into yield‑bearing arrangements by embedding them in lending or staking services, even though the tokens themselves do not pay interest. They say this undermines the distinction between electronic money, which is meant for payments, and bank deposits, which are intended for saving.

Proposed regulatory changes

• Expand MiCA’s ban on remuneration to cover both direct interest payments and indirect returns generated through crypto‑based lending, borrowing, staking or similar products.
• Replace the existing minimum‑deposit reserve requirement (30 % for regular tokens, 60 % for significant tokens) with liquidity rules based on asset maturities of one to five working days.
• For significant stablecoins, require at least 40 % of reserve assets to be liquid within one day and 60 % within five days; lower thresholds apply to non‑significant tokens (20 % and 30 %).

Implications for the market

By preventing stablecoins from being used in yield‑generating structures, the ECB aims to keep electronic money focused on payments and avoid creating an uneven playing field between crypto firms and traditional financial institutions. The liquidity‑based reserve approach would also reduce the risk that large stablecoin issuers place sudden, sizable withdrawals on banks during redemption spikes.

Parallel debates in the United States

Similar concerns have been raised in the U.S., where banking groups have urged tighter limits on stablecoin reward programs under the CLARITY Act, arguing that such incentives could divert deposits away from banks. While the U.S. proposal focuses on preventing reward‑driven deposit outflows, the ECB’s plan addresses the opposite risk – large stablecoin deposits that could strain banks if redeemed quickly.