Stablecoins and Interest Payments : Say Goodbye to Interests !

Under Article 50 of the MiCA Regulation, stablecoin issuers are strictly prohibited from paying interest on their tokens. Here is exactly what MiCA stipulates :

1. No interest payments by issuersCompanies issuing stablecoins (such as Circle’s EURC) may not, under any circumstances, reward their users by paying them interest for holding these tokens.

2. Service Providers Also Prohibited from Paying InterestsCrypto asset service providers, similarly, cannot offer interest payments when providing services related to stablecoins.

3. Indirect Interests Are Also ForbiddenAny indirect form of reward based on the duration of token holding is also strictly forbidden, even if provided by third parties and not directly by the issuer. Simply put, any reward linked to how long tokens are held is prohibited under MiCA.

Examples of Prohibited Interests:

• ❌ Direct Interest Payments : E.g., You receive a 2% loyalty bonus for holding EURC stablecoins in your wallet for 12 months.

• ❌ Premium Redemption Linked to Holding Period : An issuer offers to repurchase your tokens at a higher price, but only if you hold them for a specific duration.

• ❌ Cashback Tied to Minimum Holding Period : You receive a 1% cashback but only if you retain your tokens for at least 90 days.

• ❌ Loyalty Programs Linked to Holding Duration : You earn loyalty points redeemable in stablecoins, proportional to how long you hold your tokens.

• ❌ Referral Bonuses with Duration Conditions : You receive 10 additional stablecoins, but only if the referred tokens are held for at least 3 months.

What Rewards Are Still Allowed with Stablecoins?

Rewards not linked to the duration of holding remain possible :

• ✅ One-time Rewards (Airdrops or Welcome Bonuses) : You receive tokens as a one-off promotional offer unrelated to holding duration.

• ✅ Immediate Fixed Cashback : For instance, a consistent cashback of 1% per transaction without any requirement of holding duration.

• ✅ Immediate Fixed Discounts : A permanent 10% fee reduction unrelated to how long tokens are held.

• ✅ Non-financial Benefits : Advantages such as exclusive access to services or premium functionalities are permitted if they do not represent financial interest linked to token holding duration.

#Stablecoins #MiCA #Crypto #EURC #Article50 #StablecoinRedemption #Circle #EMT #CryptoRegulation #DigitalFinance #Blockchain #CryptoEurope #CryptoAssets

 #Stablecoins #MiCA #Crypto #EURC #RemboursementStablecoin #Circle #EMT #RegulationCrypto #FinanceDigitale #Blockchain #CryptoEurope #Cryptoactifs