The Great Stablecoin Rewards Fight: France Takes on the ECB Over the Fate of the Euro Token

Four French financial authorities have jointly appealed to Brussels to allow third-party stablecoin rewards under safeguards, while the European System of Central Banks pushes for a wider ban. Competitiveness of the euro stablecoin and the principle that “e-money is for payments, not savings” collide head-on in the MiCA review window.

The French Four: Rewards Should Be Regulated, Not Prohibited

On October 20, the French Treasury (Direction generale du Tresor), the Financial Markets Authority (AMF), the Banque de France and the Prudential Supervision and Resolution Authority (ACPR) filed a joint response to the European Commission’s MiCA review with a clear position: stablecoin rewards “should be regulated rather than prohibited outright, as it tends to develop in any event.” This is the first time a member-state regulator has publicly opposed, at national level, the blanket ban advocated by the European System of Central Banks (ESCB).

The French proposal targets what MiCA defines as “indirect remuneration”: rewards paid by crypto-asset service providers or platforms for holding or using a token, returns earned by funds that hold e-money tokens, and returns linked to using them for settlement. The four authorities want the Commission to set four conditions, with the European Banking Authority (EBA) to flesh out the details: full disclosure of reward terms to holders, no promise of guaranteed returns, no marketing of rewards as savings products, and continuous supervisory monitoring of the effect on bank deposits.

France does not waver on one line: e-money token (EMT) issuers themselves must remain barred from paying interest. The reasoning matches the ESCB’s. Remunerated tokens would drain bank deposits and turn a settlement asset into an investment product. The real split is over third-party rewards. France’s case points straight at competitiveness. Indirect remuneration “objectively lowers the cost of holding EMTs and can thereby support the 24/7 extension of financial services,” while “an EU framework stricter than its main competitors could weaken the position of euro-denominated EMTs.” That sentence is aimed squarely at the United States.

France’s reference point is precisely the US GENIUS Act, which bars issuers from paying interest but does not ban third-party rewards. The OCC’s implementing rules, finalized on October 21 and effective January 18, 2027, leave the question of which payments count as prohibited yield to a fact-specific assessment, effectively leaving room for third-party rewards. Circle’s USYC fund and OUSD’s reserve-income split are US products built on exactly this dividing line.

The ESCB: E-Money Is for Payments, Not Savings

A month earlier, in September, the European System of Central Banks (ESCB, including the ECB and the 27 national central banks) submitted a MiCA review response pointing in the opposite direction. The ESCB not only wants to keep the issuer-interest ban; it wants the prohibition extended to indirect rewards, including loyalty benefits, fee waivers and DeFi liquidity-mining incentives, and to unregulated crypto borrowing, lending and staking beyond MiCA’s current scope. The core argument is one sentence: “electronic money is intended to be used for making payments and not as a means of saving.”

The split is exquisitely awkward: the Banque de France, which signed the French document, is itself a member of the ESCB. The French Treasury’s notice presents the paper as a joint national position, meaning the country is at odds with the central-bank system it belongs to. Paris and Frankfurt give opposite answers to the same question. The banking industry’s stance is understandable: commercial banks worldwide are fighting stablecoin rewards, claiming the tokens could drain trillions from deposits. Yet European banks are moving in themselves. HSBC has launched its first stablecoin for 3.3 million users in Hong Kong, China, while dozens of major European banks are building a shared euro stablecoin through the Qivalis consortium.

Beyond Yield: The Split Runs Just as Deep on Reserves and Scope

France’s position on reserves is even more aggressive than on yield. The current requirement that e-money institutions hold 30% to 60% of reserves in bank deposits is rated “not at all appropriate” by the four authorities, which propose daily and weekly liquidity ratios, maturity limits and counterparty diversification instead, in line with the GENIUS Act’s reserve design. The ESCB also supports replacing the deposit floor with liquidity buckets, so on reserves the two positions are close, and the real fissure is over rewards. France also wants to limit MiCA’s scope to euro tokens offered or traded in the EU, which would let issuers abroad issue in euros without full EU authorization, arguing that the current rule deters issuance in euros. This aligns with the EBA’s October 14 designation of USDC as the first “significant e-money token” in the EU (the first of 45 notified EMTs; from November 12 the EBA directly supervises own funds, reserves and liquidity). Regulation is simultaneously deciding which foreign tokens count and how much a domestic token can behave like money.

Across the Atlantic: Bessent Positions Stablecoins as “A Source of Treasury Funding”

Around the same time the French document landed, US Treasury Secretary Scott Bessent took the stage at Ripple Swell in New York on October 27 with a completely different picture. Bessent called the Senate’s failure to pass the CLARITY Act disappointing, but said the Treasury has “a lot of convening powers” and will work with the SEC and CFTC to fill the gap left by the legislative failure. He described the two agencies as “great partners” and said regulators can set “guardrails” so crypto companies do not get debanked.

More consequential is his stablecoin thesis: over 90% of stablecoins in circulation are pegged to the dollar, and issuers generally hold US Treasuries as reserves, so “every newly minted stablecoin effectively creates a buyer for government debt.” Bessent called stablecoins “an important source” of Treasury funding and compared the GENIUS Act to Lincoln’s National Currency Act of 1863, positioning the stablecoin framework as infrastructure for reshaping the dollar’s global standing. He framed US-China competition for financial influence as a technology race: “We will keep our military umbrella, but I think it becomes more and more a technology umbrella.”

Put the two threads together and the global stablecoin regulatory map is clear. Washington treats stablecoins as amplifiers of dollar hegemony, applying a layered approach to yield (issuer interest banned, third-party rewards free). Frankfurt treats stablecoins as a threat to the deposit system, wanting indirect rewards sealed off too. Paris, an ESCB member that also sees itself as the gatekeeper of euro stablecoin competitiveness, tries to carve a conditional middle path. How three cities answer the same question will directly determine the relative position of euro-denominated EMTs and dollar stablecoins in the EU market over the next two years.

The market impact is immediate. After the French position became public, more than 50,000 EU citizens emailed the European Commission through industry groups, urging it to allow regulated stablecoins to offer rewards and cashback. MiCA Article 140 requires the Commission to report by June 30, 2027, and it may include a legislative proposal. Amending Article 50 (the interest ban) will be the first legislative battleground.

Key Takeaways for Practitioners