Stani Kulechov, founder of the decentralised lending protocol Aave, has gone public with his frustration over proposals from the European Central Bank and the European Banking Authority that would tighten the European Union's stablecoin rules well beyond their current scope.
In a post on X, Kulechov wrote that he was "disappointed by the European Central Bank's (ECB) and European Banking Authority's (EBA) responses to the MiCA consultation," adding that the two institutions are "not only advocating for a prohibition on paying yield on stablecoins, but also for restrictions on CASPs providing access to DeFi, including…"
The contributions in question were submitted as part of the ongoing review of the Markets in Crypto-Assets regulation, or MiCA. The European System of Central Banks filed its response on 22 September, with the EBA following two days later. Under Article 50 of MiCA, issuers of e-money tokens are already barred from paying interest: the text states plainly that "issuers of e-money tokens do not pay interest in connection with these tokens." That restriction has applied to issuers since 30 June 2024, with the rest of the regulation in force since the end of December of that year. The e-money token category covers Circle's USDC, EURC and Société Générale's EURCV.
What the ESCB and EBA are proposing
The ESCB and EBA contributions go further than the existing issuer-level ban. They propose extending restrictions to lending, borrowing and staking activity more broadly, even in cases where no regulated provider is involved at all. The EBA has also asked for a cost-benefit analysis on turning loan intermediation into a formal MiCA-licensed service, alongside suitability tests, leverage caps and the possibility of certifying DeFi protocols directly.
None of this is law yet. Any extension of the yield ban beyond issuers and licensed crypto-asset service providers would require a vote by both the European Parliament and the Council of the EU before it could take effect.
A transatlantic contrast
The European debate sits in contrast with developments in the United States. President Donald Trump signed the GENIUS Act into law on 18 July 2025, which likewise prohibits payment stablecoin issuers from paying yield linked simply to holding the token — a parallel restriction to MiCA's Article 50. A US Treasury advisory committee estimated in April 2025 that checking account deposits in the country stood at approximately $6,600 billion, underscoring the scale of the market US and EU regulators are seeking to manage. The US also scrapped, on 10 April 2025, a tax reporting rule that had classified DeFi interfaces as brokers. Euro-denominated stablecoins, meanwhile, remain a small corner of the global market, representing less than 1% of total stablecoin supply.
Aave, which launched in 2020 and now has roughly $34 billion supplied across its markets, issues its own stablecoin, GHO, and has built an institutional access product called Horizon for tokenized real-world assets. The protocol's business model rests partly on the kind of lending and borrowing activity the ESCB and EBA are now proposing to bring under tighter regulatory scrutiny.
The consultation lands as the ECB pursues its own digital currency project. The Governing Council approved moving to the next phase of the digital euro on 30 October 2025, with a pilot targeted for the second half of 2027 and issuance potentially following in 2029, contingent on a vote by co-legislators on the underlying regulation.
