Crypto industry hits back at regulator calls for EU stablecoin reward ban - The Banker

The pushback follows calls from European regulators to prohibit rewards on stablecoin holdings, a proposal that would prevent issuers and platforms from offering incentives such as interest-like payouts to users who hold these tokens. Industry participants argue that such a ban would disadvantage EU-based firms against competitors in other jurisdictions and could push activity into less-regulated venues.

The debate matters because stablecoins sit at the centre of crypto trading and payments, and reward programmes have become a key tool for attracting and retaining deposits. If the ban were adopted, issuers could lose a significant lever for building liquidity, while banks and traditional payment providers might gain ground in euro-denominated digital cash.

What to watch: how EU authorities frame rewards under the existing Markets in Crypto-Assets framework, whether any restriction targets issuers, platforms, or both, and how other major markets respond. The outcome will shape where stablecoin liquidity concentrates and how competitive Europe remains as a base for digital-asset firms.