According to the crypto advocacy group Stand With Crypto EU, more than 50,000 Europeans have urged the European Commission to relax restrictions on rewards for stablecoins in the review of the EU's Crypto Assets Markets Regulation (MiCA) framework.
This move comes as the European Commission concluded its review and consultation process on MiCA on Wednesday. Stand With Crypto EU hopes that regulated stablecoin providers will be able to offer incentives including cash refunds, loyalty benefits, and reduced transaction fees.
The organization stated that during the consultation period, over 50,000 supporters submitted their opinions to the European Commission; in addition, more than 126,000 people separately signed a petition calling on the EU to adopt more lenient policies regarding stablecoins.
Stand With Crypto EU Propaganda vehicle outside the European Parliament in Brussels, Belgium. Source: Stand With Crypto EU
MiCA Currently, issuers and crypto service providers are prohibited from paying interest on stablecoins. Stand With Crypto believes that this restriction puts stablecoins at a disadvantage compared to bank deposits and other digital currency products that can offer benefits to customers.
Stand With Crypto indicates that the number of responses received for this event exceeded six times the 8,221 responses received to the European Central Bank's (ECB) euro-related consultations, and is also significantly higher than the 198 responses received by the European Commission during its 2020 crypto regulations consultations.
Stand With Crypto Calls on the EU to Compete with the US
Stand With Crypto EU General Manager Harry Pearce Gould told Cointelegraph: "We call on the European Commission to use the MiCA review to allow regulated stablecoins to provide rewards to their holders."
When asked whether Europe should adopt regulatory models other than those of the European Union, Pearce Gould pointed to the United States:
"The United States has clearly chosen to support stablecoins as the tokenized settlement layer. Europe does not need to copy this approach, but it does need to compete with it."
He added that allowing a reward mechanism could help euro-denominated stablecoins gain adoption and compete with dollar-denominated stablecoins.
"A strong euro-stablecoin is important for the global status of the euro as well as for the EU's payment sovereignty," he said.
The European Central Bank system seeks to amend the regulations for stablecoins
At the time of this event, central banks across Europe were also pushing for more extensive modifications to the handling methods of stablecoins in MiCA.
In the response submitted to the European Commission on September 22 for review by MiCA, the European Central Bank system ( ESCB ) called for the extension of the existing ban on stablecoin interest to profitable lending and collateral arrangements.
The European Central Bank also specifically pointed out potential liquidity mismatches and stated in June that stablecoins are settled around the clock, while their reserve assets may still operate according to traditional settlement times.
These proposals emerge within the European Central Bank's broader concerns regarding the potential impact of stablecoins on financial stability.
The President of the European Central Bank, Christine Lagarde, warned in May that if deposits shifted from banks to stablecoins, it could weaken banks' lending and the transmission of monetary policy. She also argued that Europe should prioritize the establishment of tokenized financial infrastructure supported by central bank money.
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