ECB Raises Interest Rates, but Euro Stablecoin Holders Continue Receiving No Yield
The European Central Bank (ECB) increased its key interest rates by 25 basis points on September 10, bringing the deposit facility rate to 2.5%. This move is aimed at curbing inflation, which remains above target due in part to ongoing pressures from energy prices linked to conflicts in the Middle East. Despite this hike, euro stablecoin holders continue receiving no yield on their holdings. Under EU's Markets in Crypto-Assets (MiCA) regulation, issuers of e-money tokens like Circle’s EURC are prohibited from offering interest or benefits tied to token holding periods. This creates a disparity between the ECB rate and what investors can earn through stablecoins. The gap now stands at 250 basis points, with no immediate relief for holders expecting returns on their euro-backed digital assets.
Topics: ECB interest_rates MiCA stablecoins