European central banks push to expand stablecoin yield ban to crypto lending and staking
Central bankers argue that indirect yield structures blur the line between electronic payment tokens and commercial bank deposits, distorting financial system competition.
The European Central Bank (ECB) and the European Union's national central banks want crypto platforms to be prevented from using lending, borrowing, staking and other products that offer indirect returns on stablecoin holdings.
“Electronic money is intended to be used for making payments and not as a means of saving,” the European System of Central Banks (ESCB) said in a response to the European Commission’s consultation on reviewing the Markets in Crypto-Assets regulation (MiCA).
In the 57-page response, the group said it “continues to support the prohibition on CASPs paying remuneration on stablecoins,” referring to crypto-asset service providers. The ban, it said, should not be limited to services already governed by MiCA, which began taking effect in June 2024, and should also cover unregulated activities, including crypto lending, borrowing and staking.
The ECB said stablecoins can be “transformed into yield-bearing arrangements through lending, staking or other layered structures,” potentially circumventing the prohibition on direct remuneration. EU rules should prevent that outcome, it said.