More than 50,000 Europeans have sent letters to the European Commission urging it to ease MiCA restrictions on stablecoin rewards during a consultation that ended on Wednesday, according to Stand With Crypto EU.

The petition gathered 126,000 signatures; calls for cashback and discounts

Stand With Crypto EU is advocating for regulated stablecoin providers to be allowed to offer holders incentive programs such as cashback, loyalty bonuses, and fee discounts. Separately, more than 126,000 people have signed a petition supporting the initiative. Currently, MiCA prohibits issuers and crypto service providers from paying interest on stablecoins, which the organization argues puts them at a disadvantage compared to bank deposits and other forms of electronic money that offer customer benefits. The group estimates that the letter campaign surpassed by more than six times the 8,221 responses to the ECB’s digital euro consultation and far exceeded the 198 responses to the European Commission’s 2020 consultation on crypto asset rules.

ESCB proposes stricter ban on stablecoin yields

Amid the campaign, European central banks are proposing to expand MiCA requirements. In its September 22 response, the European System of Central Banks called for the ban on “interest” for stablecoins to also cover lending, borrowing, and staking schemes that generate yields. The ESCB also suggested replacing the rule on minimum bank deposit shares in issuers’ reserves with liquidity thresholds to reduce the risk of pressure on banks in the event of a sudden withdrawal of deposits during a stablecoin “run.”

ECB highlights liquidity risk; Lagarde on deposit outflows

The ECB has previously pointed to potential liquidity gaps: stablecoin settlements occur around the clock, while underlying reserve assets may follow traditional settlement schedules. In May, ECB President Christine Lagarde warned that deposit outflows from banks into stablecoins could weaken lending and the transmission of monetary policy, emphasizing the priority of a tokenized financial infrastructure based on central bank money.

"Europe needs to compete" with the US

Stand With Crypto EU General Manager Harry Pearce Gould stated that the MiCA review should allow regulated stablecoins to offer rewards to holders. According to him, the US has chosen stablecoins as a settlement layer for tokenization; Europe "does not need to copy this, but needs to compete." He added that allowing rewards could help euro-denominated stablecoins gain adoption and compete with dollar-denominated ones.