Central banks want to expand ban on yield from cryptocurrencies

The European Central Bank (ECB) and national central banks of the EU want to tighten existing rules for cryptocurrencies. They aim to not only maintain the ban on direct interest payments for stable cryptocurrencies but also address indirect yields through lending, borrowing, and staking. The European System of Central Banks (ESCB) emphasizes that electronic money is intended for payments and not as a savings instrument. The central banks advocate that the ban should not be limited to regulated services but also encompass unregulated activities. This is to prevent undermining the distinction between electronic money and bank deposits. Additionally, the central banks want to replace the current requirement of 60 percent bank deposits for large issuers with rules related to the speed at which reserves are available. They propose that issuers hold more reserves in highly liquid assets that are available within 1 to 5 business days.

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