The European System of Central Banks has submitted recommendations to the European Commission calling for tighter cryptocurrency rules under the Markets in Crypto-Assets regulation, urging an outright ban on stablecoin interest and staking yields alongside a push to centralise crypto firm licensing under the European Securities and Markets Authority.
Centralised oversight proposals
Under the submitted proposals, banking authorities are seeking stricter controls across the bloc, with the European Central Bank stating that “the prohibition of paying interest on stablecoins must remain” as European Union policymakers review the existing framework. The central bank also asserted that “the staking, lending and borrowing of crypto assets should be regulated at the Union level.”
The move comes as the European Commission conducts a consultation process scheduled to conclude on 30 September. MiCA has been in force since December 2024, with its transition period for existing operators ending on 1 July.
Regulatory divergence and market moves
One day prior to releasing its recommendations, the European Central Bank introduced Pontes, an operational system designed for settling tokenised financial assets with central bank money. National licensing has already seen friction across member states. Binance withdrew its Greek licensing application on 24 June.
The European push for stricter curbs contrasts with shifting legislative efforts in Washington. The 2025 US GENIUS Act prohibited stablecoin issuers from paying interest while allowing exchanges to offer rewards, while the CLARITY Act crypto bill failed to pass in the US Senate by 10 votes on 15 September.
Source: European Central Bank
