The European Central Bank together with national central banks across the European Union want digital asset platforms prohibited from offering borrowing, lending, staking, or alternative instruments that create indirect yields on stablecoins.
“Electronic money is intended to be used for making payments and not as a means of saving,” noted the European System of Central Banks in a statement provided as feedback on the European Commission inquiry regarding the Markets in Crypto-Assets framework review.
Within the 57-page document, the coalition indicated it “continues to support the prohibition on CASPs paying remuneration on stablecoins,” pointing to crypto-asset service providers. The restriction, they argued, ought not to remain confined strictly to mechanisms already regulated under MiCA—which took effect in June 2024—but should likewise encompass unmonitored operations including borrowing, lending, and staking.
The institutions warned that permitting indirect payouts might blur boundaries separating bank deposits from electronic money while simultaneously disrupting fair competition throughout the European Union financial architecture.
“Maintaining and, where necessary, strengthening the prohibition, covering both direct and indirect forms of remuneration, should be a clear legislative priority,” asserted the ESCB.
Their stance mirrors a recent conflict underlying discussions surrounding the U.S. Clarity Act. Eight American banking associations pushed lawmakers to strengthen limits on stablecoin incentives within the proposed legislation, arguing that crypto trading platforms could otherwise furnish interest-bearing yields rivalling traditional bank deposits. Ultimately, the Clarity Act failed via a 49-50 procedural tally, where ethics provisions also carried significant weight.
The ECB highlighted that stablecoins can easily be “transformed into yield-bearing arrangements through lending, staking or other layered structures,” risking circumvention of current bans on direct remuneration. European legislation must actively prevent such scenarios, officials added.
Furthermore, national monetary authorities suggested eliminating the MiCA mandate requiring stablecoin providers to maintain a portion of reserves within commercial bank deposits, cautioning that this guideline exposes financial institutions to sudden liquidity drains during a bank run. Current regulations oblige stablecoin creators to keep at least 30% of backing assets inside credit institution accounts, scaling up to 60% for tokens officially classified as significant under MiCA.
According to the ESCB, this mandatory minimum deposit requirement should be superseded by standards obligating token creators to maintain specified percentages of reserve instruments maturing within one to five business days.
The proposed framework shifts attention away from the specific location where reserves are stored toward how rapidly those assets convert back into liquid cash. The ESCB cautioned that massive stablecoin deposits create volatile funding streams for commercial banks, leaving institutions vulnerable if an issuer demands immediate withdrawals to satisfy redemption requests.
As a starting point, the central banks highlighted draft recommendations from the European Banking Authority. Those guidelines mandate that significant stablecoins maintain a minimum of 40% of reserves in instruments maturing within one day alongside 60% within five business days, while suggesting 20% and 30% thresholds respectively for non-significant tokens.
Originally published at https://www.coindesk.com/policy/2026/09/22/european-central-banks-push-to-expand-stablecoin-yield-ban-to-crypto-lending-and-staking.
