ECB calls for tougher EU crypto rules and wider ban on stablecoin interest - Yahoo Finance UK

The European Central Bank is pushing for stricter crypto regulation across the EU, including a broader ban on paying interest on stablecoin holdings. The call extends beyond existing rules under the Markets in Crypto-Assets (MiCA) framework, signalling that supervisors see current protections as insufficient for a sector that increasingly touches mainstream finance.

At the centre of the debate is the role of stablecoins — tokens pegged to traditional currencies — which the ECB has warned could fragment the euro area's monetary system if they scale without oversight. Interest payments on such holdings are viewed by critics as a way to mimic bank deposits without equivalent safeguards, blurring the line between regulated banking and unregulated crypto intermediation.

For markets, the key question is how far EU lawmakers will follow the ECB's lead. Tighter rules could reshape the competitive landscape for stablecoin issuers and crypto platforms operating in Europe, while also influencing global regulatory thinking. What to watch: the European Commission's next legislative proposals, the response from the crypto industry, and whether other major jurisdictions adopt similar restrictions.