50,000 Europeans just told MiCA: stablecoins deserve treats too 🍪

More than 50,000 Europeans have petitioned the European Commission to loosen restrictions on stablecoin rewards during the bloc's review of the Markets in Crypto-Assets (MiCA) framework, according to crypto advocacy group Stand With Crypto EU. The campaign concluded as the Commission closed its MiCA review consultation on Wednesday, with Stand With Crypto EU urging that regulated stablecoin providers be permitted to offer incentives including cashback, loyalty benefits and fee reductions. The group said more than 126,000 people have additionally signed its petition calling for a more permissive EU approach to stablecoins.

Stand With Crypto EU campaigners parked a vehicle outside the European Parliament in Brussels, Belgium, as part of the effort. The group said the campaign generated more than six times the 8,221 responses submitted to the European Central Bank's digital euro consultation and far exceeded the 198 responses received during the Commission's 2020 consultation on crypto rules. MiCA currently prohibits issuers and crypto service providers from paying interest on stablecoins, a restriction Stand With Crypto argues places those products at a disadvantage relative to bank deposits and other e-money products that can offer benefits to customers.

Stand With Crypto EU general manager Harry Pearce Gould told Cointelegraph: "We are calling on the Commission to use the MiCA review to allow regulated stablecoins to offer rewards to holders." Asked whether Europe should look to regulatory models outside the EU, Pearce Gould pointed to the US, stating: "The US has made a clear choice to back stablecoins as the settlement layer for tokenisation. Europe doesn't need to copy that, but it does need to compete with it." He added that allowing rewards could help euro-denominated stablecoins gain adoption and compete with dollar-pegged tokens such as $USDT and $USDC, saying: "Strong euro stablecoins matter for the euro's global standing and the EU's payment sovereignty."

The campaign coincides with separate pressure from European central banks for broader changes to MiCA's stablecoin provisions. In a Sept. 22 response to the MiCA consultation, the European System of Central Banks (ESCB) called for the existing prohibition on stablecoin interest to be extended to lending, borrowing and staking arrangements that generate yield. The ESCB also proposed replacing MiCA requirements that stablecoin issuers hold a minimum share of their reserves in bank deposits with liquidity thresholds, arguing that the existing rules could strain lenders if a stablecoin run forced an issuer to rapidly withdraw deposits. The ECB has separately highlighted a potential liquidity mismatch, noting in June that stablecoins settle around the clock while their reserves are settled only during banking hours.