Frankfurt in Aave’s sights. Stani Kulechov, founder of the first decentralized lending protocol Aave, published on X a charge against the European Central Bank and the European Banking Authority. In question, their contributions to the consultation on the revision of MiCA. The two institutions are calling for an expansion of the ban on remuneration for stablecoins. They are also calling for a serious tightening of the screws on the access of European providers to DeFi.
Platforms approved in the Union have more to lose than a few performance points. In fact, these technical documents decide whether a regulated player in Europe will still be able to connect its customers to an onchain protocol.
Key Points
The ECB and the EBA ask to extend the barrier posed by Article 50 of MiCA beyond issuers and service providers, to lending, borrowing and staking
The two institutions also want to regulate the capacity of approved players to direct their customers towards onchain protocols
Stani Kulechov contrasts the absence of a paying issuer and the non-custodial nature of Aave's loan markets
Any extension of the system will require a vote by the European Parliament and the Council, not a simple recommendation
MiCA: ECB and EBA want to tighten the ban on stablecoin yields
The ban already exists. The issuers section of MiCA has applied since June 30, 2024, the rest of the regulation since the end of December. No issuer of electronic money tokens can pay interest to its holders. The category includes Circle USDC, Société Générale EURC or EURCV. The crypto-asset service providers (PSCA) who distribute these tokens are also in the same boat.
“Issuers of electronic money tokens do not pay interest in connection with these tokens. »
Article 50 of the European MiCA Regulation (EU) 2023/1114
What the ECB and EBA are proposing is to close the back door. Article 50 already prohibits paying interest for simply holding a stablecoin. This also applies to a discount or advantage granted by a third party. However, you can still get around the ban by lending your tokens, staking them, or receiving loyalty points. This is what the contributions want to catch.
The clearest answer comes from the European System of Central Banks (the ECB and national central banks). His contribution dates from September 22. The ban should no longer stop at services already covered by MiCA. It should also target lending, borrowing and staking, even when no approved service provider is in the loop. Two days later, the EBA said the same thing differently. Lending a stablecoin to obtain a return, according to her, is to circumvent what the regulation prohibits. The reasoning has not changed since Libra, Facebook's currency project. Indeed, a profitable stablecoin resembles a bank account. However, if it attracts deposits, banks have less money to lend to the economy. Thus, the return ban protects the banks' balance sheets as much as the saver.
Stablecoins: Washington is leading the same debate
The same fight is playing out in Washington. Donald Trump promulgated the GENIUS Act on July 18, 2025. It already prohibits the issuer of a payment stablecoin from paying a return linked to sole holding. Since then, American banking lobbies have asked to extend the ban to exchange platforms and their subsidiaries. In April 2025, a Treasury advisory committee looked into Americans' checking accounts. He put the deposits there at around $6.6 trillion. However, it is the easiest stock to move to a stablecoin.
On the other hand, the European debate is on a tiny basis. The dollar concentrates most of the stablecoins in circulation. Euro-denominated tokens remain well below 1% of this market.
DeFi: Aave fears a lock on access for European providers
But it’s the second part of the contributions that makes Stani Kulechov jump. The two authorities want to regulate the access of approved service providers to decentralized protocols. Concretely, the EBA requires a cost-benefit analysis to make loan intermediation a MiCA service. It also puts on the table adequacy tests, leverage ceilings and possible certification of protocols. An approved French or German platform would then no longer be able to direct its customers towards Aave or Morpho without this filter. The founder of Aave sees the risk of walled gardens. Regulators would in fact decide which protocols are suitable for European users.
He opposes this reading to the mechanics of the protocol. No issuer pays interest on Aave. The rate comes from the meeting between deposits and borrowings on an open market. Additionally, funds remain in smart contracts that no one controls unilaterally. Finally, the code has been open source since the launch of the protocol in 2020. According to him, cutting off regulated players from this plumbing would therefore not cause European demand to disappear. It would instead migrate to interfaces hosted outside the Union, without the slightest identity verification.
Aave, an actor who has a lot to lose
The plea is self-serving, and the protocol has something to defend. Aave dominates decentralized credit, with approximately $34 billion provided across its markets. It also issues its own stablecoin, GHO. Furthermore, with Horizon, it opened access for institutional investors to real-world tokenized assets. A Europe closed to service providers would therefore deprive it of a regulated distribution channel. Conversely, on April 10, 2025, Washington canceled the tax reporting rule which assimilated DeFi interfaces to brokers.
The ECB is also piloting a competing project. Its board of governors validated on October 30, 2025 the transition to the next phase of the digital euro. A first pilot is targeted for the second half of 2027, and a broadcast is possible in 2029. This, however, remains pending the vote on the regulation by the co-legislators. The digital euro is not designed to pay. However, a stablecoin in euros which would pay a return would be placed on the same ground. It would become a European electronic currency capable of capturing deposits.
None of this is law yet. These contributions feed into a report from the European Commission. Any extension of the ban beyond approved issuers and service providers will then have to go through an amendment to the regulation. A vote by the European Parliament and the Council will therefore be required. Until then, neither Aave nor its European users need approval to lend onchain.
