50,000 Europeans Seek Stablecoin Reward Changes in MiCA Review

More than 50,000 Europeans urged the European Commission to relax rules on stablecoin rewards during a review of the bloc’s Markets in Crypto-Assets Regulation, known as MiCA.

The campaign was organized by crypto advocacy group Stand With Crypto EU before the Commission closed its consultation on Wednesday. The group wants compliant stablecoin providers to offer cashback, loyalty benefits and lower fees. More than 126,000 people have separately signed its petition for a more permissive EU approach to stablecoins.

MiCA prohibits stablecoin issuers and crypto service providers from paying interest to holders. Stand With Crypto EU argues that the rule puts stablecoins at a disadvantage to bank deposits and electronic money products, which can offer customer benefits.

“We are calling on the Commission to use the MiCA review to allow regulated stablecoins to offer rewards to holders,” Harry Pearce Gould, the group’s general manager, said.

The campaign received more than six times the 8,221 responses submitted during the European Central Bank’s consultation on the digital euro. It also exceeded the 198 responses recorded during the Commission’s 2020 consultation on crypto regulation.

Pearce Gould pointed to the United States’ support for stablecoins as a settlement layer for tokenized assets. He added that Europe did not need to copy the US approach but needed to compete with it. In his view, rewards could help euro-denominated stablecoins gain adoption against dollar-denominated alternatives.

“Strong euro stablecoins matter for the euro’s global standing and the EU’s payment sovereignty,” Pearce Gould said.

The campaign comes as European central banks seek broader changes to MiCA’s stablecoin rules. In a Sept. 22 response to the Commission’s review, the European System of Central Banks proposed extending the ban on interest to lending, borrowing and staking arrangements that generate returns.

The central banks also proposed replacing MiCA’s requirement for issuers to keep a minimum share of reserves in bank deposits with liquidity thresholds. They warned that the current rules could put pressure on lenders if a stablecoin run forced an issuer to withdraw large amounts of deposits quickly.

The ECB has highlighted a possible timing mismatch between stablecoin transactions and the settlement of reserve assets. Stablecoins can process transactions around the clock, while some reserve assets operate on traditional banking schedules.

ECB President Christine Lagarde warned in May that deposits moving from banks into stablecoins could reduce bank lending and weaken the transmission of monetary policy. She called for Europe to focus on tokenized financial infrastructure supported by central bank money.