France Goes Against the ECB on Stablecoin Rewards in MiCA Review
Key Takeaways
- Four French financial authorities want the EU to allow third-party stablecoin rewards under certain conditions.
- The French authorities oppose extending the stablecoin interest ban to staking and lending, unlike the EU’s central banks.
- The European Commission must report on MiCA by June 30, 2027, and may propose changes.
In a joint response on how to revise MiCA, the EU’s Markets in Crypto-Assets Regulation, the French Treasury, market regulator AMF, Bank of France, and ACPR—the banking and insurance supervisor attached to the central bank—urged the European Commission to allow crypto platforms and other third-parties to pay rewards to stablecoin holders under certain conditions.
Regulated, Not Prohibited
According to the authorities, rewards “should be regulated rather than prohibited outright, as it tends to develop in any event.” The document also refers to the approach taken by the U.S. under the GENIUS Act, which prohibits issuers from paying interest but does not ban third-party rewards.
The four institutions argue that such indirect remuneration “lowers the cost of holding EMTs [e-money tokens] and can thereby support the 24/7 extension of financial services.” They also warn that “an EU framework stricter than its main competitors on this point could weaken the position of euro-denominated EMTs.”
However, the authorities say permission to pay rewards should be subject to four conditions. Platforms paying stablecoin rewards should be transparent with holders, avoid promising guaranteed returns, and refrain from marketing rewards as savings products. They also recommend monitoring the impact of such rewards on bank deposits.
Under the current version of MiCA, both stablecoin issuers (such as USDC issuer Circle) and crypto platforms, including exchanges, are prohibited from paying interest on stablecoins simply for holding them.
The French authorities, including the country’s central bank, therefore take a different position from the European System of Central Banks (ESCB) on rewards paid by platforms. Bitcoin.com News has contacted the Bank of France for comment and will update the article if it responds.
Central Banks Urge a Wider Ban
Meanwhile, France still agrees that stablecoin issuers themselves should remain prohibited from paying interest. It also wants staking and lending regulated, but unlike the ESCB, it does not call for extending the stablecoin interest ban to those activities.
EU central banks, including the ECB, which oversees monetary policy in the eurozone, argue that MiCA’s ban on paying stablecoin holders should remain in place. They also want the ban to cover indirect perks, such as rewards, fee reductions, and certain loyalty benefits. Central banks have further urged regulators to extend the ban beyond the services MiCA regulates, including crypto asset borrowing, lending, and staking.
According to the national central banks and the ECB, “electronic money is intended to be used for making payments and not as a means of saving.”
Banks Launch Their Own Stablecoins
Worldwide, commercial banks are fighting against stablecoin rewards, claiming that these tokens could drain trillions from bank deposits. At the same time, banks are developing their own stablecoins. HSBC has launched its first stablecoin for 3.3 million users in Hong Kong, while dozens of major European banks are developing a shared euro stablecoin through the Qivalis consortium.
As Bitcoin.com News reported, a crypto asset advocacy group recently said more than 50,000 EU citizens had emailed the European Commission, urging it to allow regulated stablecoins to offer rewards to holders and crypto platforms to provide perks such as cashback, loyalty benefits, and fee reductions.
In either case, the battle over stablecoins and other MiCA rules will continue. The European Commission must report to EU lawmakers on MiCA by June 30, 2027, and may propose changes to the law then.
