TLDR
- A grassroots campaign organized by Stand With Crypto EU generated over 50,000 letters to the European Commission demanding changes to stablecoin reward restrictions.
- The public consultation period for the MiCA regulation ended on September 30.
- Existing MiCA provisions prohibit stablecoin providers from offering interest payments, cashback incentives, or loyalty programs to token holders.
- The European System of Central Banks is advocating for expanded restrictions that would include lending platforms, staking services, and borrowing protocols.
- A separate online petition calling for more accommodating stablecoin legislation has attracted over 126,000 signatures.
Tens of thousands of European citizens have made their voices heard in Brussels this week. Through a coordinated effort, more than 50,000 individuals submitted written appeals to the European Commission, calling for regulatory reform that would permit stablecoin issuers to provide financial incentives to users.
These submissions arrived as part of the official public comment period on the Markets in Crypto-Assets Regulation (MiCA). The consultation window shut on September 30.
Stand With Crypto EU, a digital asset advocacy organization, spearheaded the initiative. The group revealed the participation figures through an official statement released Thursday.
Understanding MiCA’s Current Limitations
The existing MiCA framework explicitly forbids stablecoin issuers from providing interest payments to holders. The prohibition extends to additional benefits such as cashback programs and loyalty reward systems.
According to Stand With Crypto EU, this regulatory approach creates an uneven playing field. Traditional banking institutions and electronic money providers face no such restrictions when offering customer incentives.
The advocacy organization is urging the Commission to revise these provisions during the ongoing MiCA evaluation. Their proposal would permit licensed stablecoin operators to offer cashback programs, loyalty schemes, and fee discounts within a transparent regulatory framework.
Harry Pearce-Gould serves as general manager of Stand With Crypto EU. He characterized the overwhelming response as evidence of significant grassroots interest.
“These are people who use stablecoins, understand what the rewards ban means for them, and want to be heard before the Commission decides what comes next for MiCA,” he said.
The campaign’s reach far exceeded previous European Union cryptocurrency consultations. The number of letters submitted was approximately six times greater than those received during the European Central Bank’s digital euro consultation in 2021.
The response also dwarfed the 198 submissions the Commission collected during its initial 2020 consultation process on cryptocurrency regulation.
Banking Authorities Advocate for Expanded Restrictions
While cryptocurrency advocates press for relaxed regulations, European monetary authorities are moving in the opposite direction.
The European System of Central Banks submitted its official position on September 22 during the MiCA review period. Central bank representatives called for expanding the existing prohibition on stablecoin interest payments.
Their recommendation would extend the ban to encompass cryptocurrency lending platforms, borrowing services, and staking mechanisms. According to central banks, these products can deliver indirect yields to stablecoin holders that function similarly to traditional interest.
Banking authorities also expressed concerns regarding stablecoin reserve management practices. They suggested replacing current regulationsāwhich mandate that issuers maintain a specified portion of reserves in bank depositsāwith alternative liquidity standards.
The central banks argue that rapid, large-scale stablecoin redemptions could compel issuers to withdraw bank deposits abruptly. Such scenarios could potentially destabilize affected financial institutions.
The European Central Bank has previously articulated these concerns. In June, officials highlighted the timing mismatch between instant stablecoin transactions and the slower settlement periods of underlying reserve assets.
ECB President Christine Lagarde addressed this issue during remarks in May. She cautioned that capital flows from traditional bank accounts into stablecoins could diminish banks’ lending capacity.
Alongside the letter-writing effort, Stand With Crypto EU reports that more than 126,000 individuals have endorsed a petition. The petition advocates for the European Union to embrace a more permissive regulatory stance on stablecoins.
The organization counts multiple cryptocurrency and financial services companies among its supporting partners, including Boerse Stuttgart Digital and IOTA. Stand With Crypto was launched by Coinbase in 2023 and has subsequently expanded operations into the United Kingdom and continental Europe.
The European Commission has not announced a timeline for publishing the MiCA review findings or introducing potential regulatory amendments.
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