Euro Stablecoin Interest Frozen as ECB Deposit Rate Hits 2.5%

The European Central Bank has increased its interest rates. However, for anyone possessing a euro stablecoin, the yield stays unchanged at zero.

Thursday saw the European Central Bank lift each of its three main rates by 25 basis points. Effective September 16, the deposit facility rate, which represents the interest banks receive for depositing funds overnight at the Eurosystem, climbs to 2.50%.

Inflation remains the driving factor. The ECB’s latest projection puts headline inflation at 3.0% for 2026, 2.5% for 2027 and 2.1% for 2028, with the conflict in the Middle East continuing to push energy costs higher.

“Inflation is set to remain well above target for an extended period,” the ECB said.

In July, BeInCrypto noted that economists had anticipated a September hike.

Today we raised our key interest rates by 0.25 percentage points.

We are doing this because the Middle East conflict keeps driving up prices.

Inflation is likely to be above our 2% target for a quite a while.https://t.co/1jT7PP24gZ pic.twitter.com/DDzVfK3qJq

— European Central Bank (@ecb) September 10, 2026

MiCA Produces a Peculiar Disconnect

Under MiCA regulations, euro stablecoins like Circle’s EURC classify as e-money tokens. Article 50 prohibits issuers and crypto platforms from paying interest to holders. The prohibition extends to any advantages or reductions linked to the duration the token is held.

“Any remuneration or any other benefit related to the length of time” a token is held can count as interest, MiCA says.

Issuers, however, are required to protect the funds that back these tokens. A minimum of 30% must be held in bank deposits. The remainder can be placed in safe, highly liquid, low-risk investments.

The reserves themselves can earn returns. But the holder is not permitted to receive any interest just for holding the token.

Circle has been offering EURC under a French electronic money licence from July 2024. Its current market capitalization stands at about $466 million.

This divergence is not a recent development. At the time MiCA’s stablecoin regulations came into force in June 2024, the ECB deposit rate stood at 3.75%. The region’s authorized crypto market has functioned under the interest prohibition from that point onward.

The rate increase on Thursday brings the difference between the ECB deposit rate and the allowed yield for holders back to 250 basis points.

The ECB has stated it is “not pre-committing to a particular rate path.” For euro stablecoin holders, the outlook is more certain. No matter what occurs going forward, the token itself continues to yield nothing.