50,000 Europeans Push EU to Loosen MiCA Stablecoin Rewards Rules
A mass lobbying campaign has landed on the European Commission's desk at a critical moment: more than 50,000 EU residents wrote to Brussels during its MiCA review consultation, urging regulators to let stablecoin providers offer rewards to holders. For accounting firms, CFOs, and compliance teams overseeing crypto portfolios, the outcome could redefine how euro-denominated stablecoins are classified, reported, and monetised under both IFRS and EU regulatory frameworks.
What the Stand With Crypto EU Campaign Is Asking For
The campaign was coordinated by advocacy group Stand With Crypto EU, whose general manager Harry Pearce Gould confirmed to Cointelegraph that the organisation mobilised supporters to submit responses to the Commission's MiCA review consultation before it closed. Beyond the 50,000-plus letters, a separate Stand With Crypto EU petition calling for a more permissive EU approach to stablecoins had gathered more than 126,000 signatures by the time the consultation window closed.
The Core Demand: Rewards, Cashback, and Loyalty Benefits
The group is asking the Commission to allow regulated stablecoin issuers and crypto-asset service providers (CASPs) to offer incentives such as cashback, loyalty benefits, and fee reductions. It argues that MiCA's current ban on paying interest on stablecoins places these products at a structural disadvantage relative to bank deposits and e-money products, which can legally pass benefits on to customers.
In terms of consultation volume, Stand With Crypto EU said its campaign produced more than six times the 8,221 responses the European Central Bank received during its digital euro consultation, and dwarfed the 198 replies the Commission received during its 2020 crypto consultation process.
The Euro-Dollar Competitive Argument
Pearce Gould framed the issue partly as one of strategic competitiveness. He noted that the US has made a deliberate policy choice to support stablecoins as a settlement layer for tokenisation, and suggested that the EU does not need to replicate that model exactly, but does need to offer a credible alternative. He argued that allowing rewards could help euro-denominated stablecoins gain traction against dollar-denominated ones, and tied the issue directly to the euro's global standing and the EU's payment sovereignty.
European Central Banks Push for Broader MiCA Changes
The advocacy campaign did not arrive in isolation. European central banks are simultaneously pressing for structural reforms to MiCA's stablecoin regime that go well beyond the rewards question.
The ESCB's September Proposals
In its own response to the Commission's MiCA review, submitted on 22 September, the European System of Central Banks called for the existing interest prohibition to be extended to cover lending, borrowing, and staking arrangements that generate yield. In other words, the ESCB wants to close perceived loopholes that might allow issuers to route economic returns to holders through structural workarounds rather than direct interest payments.
The ESCB also proposed replacing current reserve requirements, which mandate that stablecoin issuers hold a minimum share of their reserves in bank deposits, with liquidity thresholds. The central banks' concern is that the deposit requirement could create systemic pressure on lenders in the event of a stablecoin run, where rapid redemptions would force issuers to withdraw large volumes of deposits from banks in a short period.
ECB's Liquidity Mismatch Warning
The ECB separately flagged a potential liquidity mismatch in June. The concern centres on a timing gap: stablecoin redemption obligations can be near-instantaneous, while the underlying reserve assets may still settle on traditional timelines. If a large redemption wave hit before reserves could be liquidated, an issuer could face a gap between what it owes holders and what it can immediately access.
ECB President Lagarde's Broader Financial Stability Concerns
ECB President Christine Lagarde raised wider concerns about stablecoins in May, warning that a significant shift of bank deposits into stablecoin arrangements could weaken bank lending capacity and disrupt monetary policy transmission. Her stated preference is for tokenised financial infrastructure that remains anchored to central bank money rather than privately issued stablecoins. This position puts the ECB at a different angle from the advocacy campaign, which wants to make privately issued euro stablecoins more attractive to retail holders through reward mechanisms.
MiCA Compliance and Accounting Implications for Firms
For accounting firms and CFOs advising clients who hold or issue stablecoins, this consultation creates near-term uncertainty but also a clear set of issues to monitor. The current rules and the proposed changes pull in different directions, and the accounting treatment depends heavily on which direction the Commission ultimately goes.
Stablecoin Accounting Under IFRS: Current Framework
Under IFRS, stablecoins are not yet addressed by a dedicated standard. IFRS 9 is typically applied to financial instruments, and whether a stablecoin qualifies as a financial asset depends on its contractual terms. A stablecoin redeemable at par on demand from a regulated issuer is likely to be treated as a financial asset, specifically as cash or a cash equivalent, or as a debt instrument measured at amortised cost, depending on its structure and the entity's business model.
If the Commission permits rewards or cashback, the accounting question becomes: how does the holder account for income received in this form? If rewards are paid in fiat or in the same stablecoin, they are likely recognised as interest income or a fee reduction, depending on their legal character. If rewards take the form of additional stablecoin units, the question of whether that constitutes income, a capital receipt, or a reduction in cost basis will need to be assessed against the contractual terms and IFRS 9 or IAS 38 depending on classification. For IFRS preparers, this is uncharted territory and will require careful legal analysis of each reward structure before applying an accounting policy.
US GAAP Considerations Under ASC 350-60
For entities reporting under US GAAP, FASB's ASC 350-60 introduced fair value accounting for certain crypto assets from fiscal years beginning after 15 December 2024. However, ASC 350-60 applies specifically to crypto assets as defined under the standard, and not all stablecoins will fall within its scope. Stablecoins with redemption rights and issuer obligations may be classified differently, potentially as financial instruments under ASC 948 or other guidance. Rewards received would similarly need to be assessed for income recognition, and consistency with the entity's existing accounting policy for crypto asset income will matter for audit purposes.
What Changes If MiCA Allows Rewards
If the Commission accepts the advocacy position and permits reward structures, regulated stablecoin issuers will need to build reward liabilities into their reserve calculations and disclose these obligations in their MiCA-mandated white papers and financial statements. Holders will need updated accounting policies to handle inflows of this type. CASPs distributing rewards on behalf of issuers will need to assess whether they are acting as agent or principal, a distinction that affects both revenue recognition and regulatory capital treatment.
If the ESCB's position prevails and the prohibition is extended to lending, borrowing, and staking arrangements, firms that have been routing stablecoin yield through these structures will need to unwind or restructure those arrangements to remain compliant, with potential derecognition and reclassification consequences on the balance sheet. Our earlier analysis of ESMA's MiCA review response on DeFi and stablecoins sets out how regulators are approaching the yield question more broadly, and is worth reading alongside this development.
What Firms Should Do Now
The consultation has closed, but the Commission's response is not yet published. That creates a window for firms to take preparatory steps without committing to a final position.
Practical Steps for Accounting and Compliance Teams
First, map every stablecoin position in the entity's portfolio or client portfolios. Note the issuer, jurisdiction, reserve structure, and any existing reward or yield mechanism. This inventory will be the foundation for any accounting policy update or regulatory reclassification exercise once the Commission issues its position.
Second, review current accounting policies for stablecoins held as treasury assets or operational float. If no policy exists, now is the time to draft one, because auditors will expect a documented rationale regardless of what happens with the MiCA review. The IFRS classification question, financial asset versus intangible asset versus cash equivalent, should be addressed in writing and reviewed against the specific contractual terms of each instrument.
Third, if your clients or entity are currently receiving yield from stablecoin lending or staking arrangements that would fall within the ESCB's proposed extended prohibition, flag this for legal review. Restructuring these arrangements after a rule change is possible but takes time, and early preparation avoids having to act under pressure.
Fourth, monitor the Commission's formal response to the consultation. The MiCA review is ongoing, and any legislative proposal to amend the stablecoin provisions will go through the standard EU co-legislative process, meaning there will be further consultation stages before anything becomes binding. Stay close to the timeline. For a wider view of how this fits into the EU's evolving crypto regulatory agenda, see our overview of the MiCA review and EU crypto single market competitiveness.
Frequently Asked Questions
Does MiCA currently prohibit stablecoin interest entirely?
MiCA prohibits issuers of asset-referenced tokens and e-money tokens from paying interest to holders. The prohibition is designed to prevent stablecoins from functioning as deposit substitutes and to protect the banking system's deposit base. Some forms of reward, such as loyalty benefits or fee waivers, occupy a grey area that the review is now expected to address.
How should a stablecoin held as treasury cash be classified under IFRS?
It depends on the contractual terms. A stablecoin redeemable on demand at par from a regulated issuer may qualify as a cash equivalent under IAS 7, provided the redemption is unconditional and there is no material credit or liquidity risk. If those conditions are not met, it is more likely a financial asset under IFRS 9, measured at amortised cost or fair value through profit or loss depending on the business model and cash flow characteristics test. Document the analysis and align it with your auditor early.
If rewards become permissible under a revised MiCA, how should a holder account for them?
The accounting treatment will depend on the legal form of the reward. Fiat cashback is likely interest income or a reduction in transaction costs. Additional stablecoin units may constitute income measured at fair value on receipt. Loyalty points or fee waivers require analysis of their contractual character. No single treatment applies to all reward structures, so each product will need its own policy assessment.
What is the ESCB's concern about the current bank deposit reserve requirement?
The ESCB argues that requiring stablecoin issuers to hold a minimum share of reserves in bank deposits creates a concentration risk for those banks. In a redemption surge, issuers would need to withdraw those deposits rapidly, potentially stressing the receiving banks' liquidity at exactly the moment when financial conditions are already under pressure. The ESCB proposes replacing the deposit floor with a liquidity threshold framework that does not create this channel of contagion.
When will the Commission publish its response to the MiCA review consultation?
No firm date has been announced as of the consultation's close. The Commission will assess the responses, including those from Stand With Crypto EU and the ESCB, before deciding whether to propose legislative amendments. Any changes to MiCA would then go through the full EU co-legislative process involving the European Parliament and Council. Firms should treat the current MiCA stablecoin rules as binding until any formal amendment is published in the Official Journal of the EU.
Source: Cointelegraph