ECB and ESCB push to close MiCA's indirect stablecoin yield loophole

The European Central Bank and the national central banks of the European Union, acting collectively as the European System of Central Banks (ESCB), have submitted a 57-page response to the European Commission’s consultation on revising the Markets in Crypto-Assets regulation (MiCA), calling for a significant tightening of stablecoin restrictions. The central banks want crypto-asset service providers (CASPs) barred not only from paying direct yield on stablecoins but also from facilitating any indirect return through lending, borrowing, staking, or layered product structures. Their core argument is that electronic money tokens are instruments of payment, not savings, and that allowing yield-equivalent arrangements through affiliated or unregulated services blurs the legal and functional boundary between e-money and commercial bank deposits.

The ESCB’s position extends the existing MiCA remuneration ban, which began taking effect in June 2024, into territory that the regulation currently leaves unaddressed. The central banks argue that unregulated activities sitting outside MiCA’s perimeter, crypto lending and staking in particular, can already replicate the economics of a deposit-like return, making the statutory prohibition easier to circumvent than to observe. Their call to make this a “clear legislative priority” signals that the next MiCA review cycle is likely to be the vehicle for codifying the extension.

On reserves, the ESCB is also proposing to discard MiCA’s current requirement that issuers hold 30 to 60 per cent of reserves as deposits at credit institutions, replacing it with liquidity-maturity thresholds. Rather than specifying where reserves must sit, the revised framework would require specified portions to mature within one to five working days, drawing on draft European Banking Authority (EBA) standards that already suggest 40 per cent of significant-stablecoin reserves mature within one day and 60 per cent within five. The central banks’ concern is that large stablecoin deposit concentrations create unstable funding for the banks holding them, exposing lenders to sudden outflows when issuers face redemption pressure.

The parallel with the United States is explicit in the ESCB’s submission: eight US banking groups made a comparable argument during the debate over the Clarity Act, urging senators to restrict stablecoin reward structures that could compete with bank deposits. The Clarity Act failed a 49 to 50 procedural vote, which suggests that the legislative outcome is far from guaranteed even when the supervisory and banking-industry consensus is aligned. For operators in the EU, however, the ESCB’s position carries considerable weight as an input to the Commission’s review, and platforms that have structured yield-adjacent stablecoin products on the assumption that indirect returns fall outside MiCA’s remuneration ban should treat that assumption as contested.