TL;DR
- Circle, Aave Labs and more than 50,000 European citizens submitted responses opposing the ECB’s position in the MiCA public consultation, which closed on September 30.
- The European System of Central Banks called for extending the ban on stablecoin yields to lending, staking and other indirect rewards within the DeFi ecosystem.
- A petition gathered more than 126,600 signatures demanding the complete removal of the yield ban for tokens backed by safe, interest-bearing assets.
The debate over the scope of MiCA regarding stablecoin yields erupted after Circle, Aave Labs and more than 50,000 citizens of the European Union submitted responses to the public consultation of the European Commission, whose deadline closed on September 30. Their positions clash directly with those of the European System of Central Banks (ESCB), which includes the European Central Bank (ECB) and seeks to tighten existing restrictions.
The ESCB argued that electronic money tokens are designed for payments, not savings, and that remunerating their holdings assimilates them to bank deposits governed by different regulations. On that basis, the body called for extending the ban on interest payments to lending, borrowing and staking, and for adding restrictions on rewards, fee discounts and loyalty benefits. It also requested that stablecoins issued outside the EU — such as Circle’s USDC — receive no differentiated treatment compared to their European equivalents.
Circle Against the ECB
In its response, Circle focused its criticism on the perimeter of the current regulatory framework, noting that only three of the 25 largest stablecoins by market capitalization currently comply with MiCA. However, Circle agreed with the ECB on the point of reserves, arguing that the mandatory floor for bank deposits increases exposure to credit risk in the banking sector.
Aave Labs, which operates Push, a subsidiary authorized under MiCA and supervised by the Central Bank of Ireland, rejected extending the ban to lending or staking. The central argument was the distinction between a yield generated by a borrower who provides collateral — assumed by the lender and comparable to lending euros or bonds — and the simple payment for holding that the regulation already prohibits. Stani Kulechov, founder of Aave, expressed his disappointment at the positions of the ECB and the European Banking Authority through X.
The Pressure of Civil Society
The most forceful rejection came from civil society. The group Stand With Crypto EU mobilized more than 50,000 people who sent emails to the Commission to allow regulated stablecoins to offer rewards, cashback and reduced fees. A separate petition gathered more than 126,600 signatures demanding the removal of the yield ban for tokens backed by safe assets that generate interest.
Harry Pearce Gould, the group’s executive director, framed the discussion in terms of competitiveness: Europe does not need to imitate the United States, but it must be in a position to compete with it. The European Commission will now need to reconcile these opposing positions as it defines how it will approach a revised version of MiCA.
