EU Regulators Move to Tighten Stablecoin Yield Rules Under MiCA

EU regulators are pushing to broaden MiCA restrictions on stablecoin returns to cover lending, borrowing and staking. The European Central Bank and national central banks said such services can replicate interest payments through indirect rewards. Meanwhile, the EBA has urged the European Commission to consider regulating crypto lending and access to DeFi lending protocols.

The EBA’s September 24 response calls for a cost-benefit analysis of adding crypto lending and borrowing intermediation to regulated crypto-asset services. It also wants requirements for firms that give clients access to DeFi lending protocols. The authority cited risks including leverage, weak credit assessments, collateral chains, fees and insufficient yield disclosures.

ESMA separately proposed proportionate safeguards for staking, lending and borrowing, alongside clearer criteria for identifying genuinely decentralized services. The European Commission closed its MiCA review consultation on September 30, with potential legislative changes to follow.