European central banks push to expand stablecoin yield ban to crypto lending and staking

Central bankers argue that indirect yield structures blur the line between electronic payment tokens and commercial bank deposits, distorting financial system competition.

Melinda 54 minutes ago 3 minutes read

European central banks push to expand stablecoin yield ban to crypto lending and staking

Central bankers argue that indirect yield structures blur the line between electronic payment tokens and commercial bank deposits, distorting financial system competition.

By Olivier Acuna|Edited by Sheldon Reback

5 minutes ago

2 min read

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ECB building lit up at night. (Kiefer/Wikimedia Commons) — The ECB is seeking to expand restrictions on stablecoin yields. (Kiefer/Wikimedia Commons)

Summary

The European Central Bank and the European Union’s national central banks want crypto platforms barred from offering lending, borrowing, staking or other products that generate indirect returns on stablecoins.
The central banks said yield-bearing stablecoins could blur the distinction between electronic money and bank deposits, circumvent existing restrictions and distort competition in the European Union’s financial system.
The banks also proposed replacing requirements that issuers keep 30% to 60% of stablecoin reserves in bank deposits with liquidity rules based on how quickly reserve assets can be converted into cash.