Stablecoin interest: MiCA article 50 bans it, and lending yield is taxable from 256 euros

In the European Union stablecoins pay no interest, at least none from the company that issues them. Article 50 of the MiCA regulation expressly bars issuers of e-money tokens from granting interest, and article 40 draws the same line for asset-referenced tokens. If a platform still shows you a yield on USDC or on a euro stablecoin, that money does not come out of the token. It comes from someone putting the token to work. The distinction decides who owes you the money when something goes wrong, and how the tax office classifies the income.

Article 50 of MiCA bars issuers from paying interest on e-money tokens

MiCA, formally Regulation (EU) 2023/1114 on markets in crypto-assets, splits stablecoins into two classes. An e-money token tracks a single official currency, the euro or the US dollar for example; USDC and EURC belong here. An asset-referenced token leans on a basket of several currencies, commodities or other assets.

For the first class, article 50(1) settles the matter in a single sentence: issuers of e-money tokens shall not grant interest. The provision applies without prejudice to article 12 of the E-Money Directive 2009/110/EC, which already imposes the same ban on classic electronic money. The recitals of the regulation also name the purpose: the use of such tokens as a store of value is meant to recede. A payment token should stay a means of payment and should not turn into a savings product.

That is an unusually hard rule, and it holds regardless of where market rates happen to stand. An issuer does earn on its reserve, because it invests the euros or dollars held against the tokens. Passing that income on to holders is what European law forbids.

A discount tied to the holding period also counts as interest

Paragraph 3 of the same article makes sure the ban cannot be relabelled away. Interest covers any remuneration or other benefit related to the length of time a holder keeps the token. Net compensation payments and discounts with an effect equivalent to interest are named explicitly. It makes no difference whether the benefit comes from the issuer itself or from a third party, and whether it attaches directly to the token or arises through the pricing of other products.

In practice that catches more models than the heading suggests. A loyalty scheme paying out more the longer a balance sits untouched falls under the same rule as an openly quoted rate. So does a fee reduction keyed to the average stablecoin balance on an account. What matters is the link to the holding period, not the wording on the product page.

Article 40 draws the same line for asset-referenced tokens

For the second class the rule sits in article 40 and reads almost identically: issuers of asset-referenced tokens shall not grant interest, and the same definition built around the holding period applies there too. One difference remains in the detail. Article 40 carries no reference to the E-Money Directive, because these tokens are not electronic money and the directive never covered them. For the holder the outcome comes to the same thing.

The interest ban also binds exchanges and custodians

The second paragraph of article 50 puts a different group under obligation: crypto-asset service providers, meaning exchanges, brokers and custodians holding a MiCA authorisation. They too shall not grant interest when they provide services related to e-money tokens. The rule therefore bites exactly where retail investors actually keep their balances, on the account of the trading platform.

What else a licensed platform in Europe has to do is collected on our page about MiCA obligations for crypto companies. Where a service provider may hold your euro balance at all was answered separately by the markets regulator ESMA in October 2026; the detail sits in our piece on euro balances at a crypto exchange.

USDC has been under split supervision since October 14, 2026

On October 14, 2026 the European Banking Authority classified the stablecoin USDC as the first significant e-money token in the European Union. Its issuer in the EU is Circle Internet Financial Europe SAS. Of 45 e-money tokens reported across the Union, one now carries that status for the first time.

From November 12, 2026 two authorities will share the work. The EBA takes over direct supervision of own funds, the asset reserve, liquidity requirements and the recovery and redemption plans. France's ACPR stays responsible for governance, qualifying holdings, fit-and-proper assessment, outsourcing and conflicts of interest. How the classification came about is described in our article on EBA supervision of USDC.

For the interest question this status counts for more than it seems at first glance. The stricter requirements on own funds and reserve cover exactly the pot an issuer could pay anything out of. The more tightly the reserve has to be run, the less room any earnings would leave, and under article 50 the issuer may not distribute them in any case.

Yield on stablecoins is created by lending, not by the issuer

If the issuer may pay no interest, where does the yield on stablecoin balances shown by some platforms come from? The income arises one step further along. Your stablecoin is lent out, deposited in a credit protocol or handed to a trading counterparty, and the interest comes from whoever borrows it. The issuer stays out of it, and the token itself throws off nothing.

That is why such offers are almost always called lending, earn or savings and not an interest account. Legally there is a credit transaction with a third party behind them, and no deposit with a bank. To see how the mechanism works, read our article on crypto lending and how the interest arises. Which stablecoins play any role in Europe is shown in our stablecoin overview.

In lending, the investor carries the platform's default risk

The difference between interest and a lending return decides who is liable when things go wrong. A euro bank balance sits behind the statutory deposit guarantee. Lent crypto-assets have no equivalent: if the other side fails, your claim is worth only as much as the debtor. Add to that the risk in the token itself, which can lose its link to the reference currency; what gives that away early is in our article on spotting a depeg.

There is one more layer that rarely appears in marketing copy. Many yield products pass the funds on to a protocol or a partner whose name the customer never learns. To judge a yield, ask who stands at the far end and what happens if that partner fails. A total loss is possible in these structures.

Our assessment: the interest ban protects holders more than the word ban suggests. A holder of an e-money token can redeem it at par at any time under MiCA; an issuer promising interest on top would have to take risks in the reserve that endanger precisely that claim. One side effect argues the other way: the ban does not end the search for yield, it pushes that search out of the regulated space and into lending products where neither a redemption claim nor a deposit guarantee applies. Both points are documented. The redemption claim stands in the regulation, and the shift can be read off the product names of providers who speak of earn and savings where the law sees a loan.

Lending income falls under section 22 no. 3 of the German Income Tax Act

In Germany stablecoins count for tax purposes as other assets and not as money. Income from lending them therefore falls under section 22 no. 3 of the Income Tax Act rather than the flat-rate withholding tax on investment income: income from services, taxed at your personal rate. The Federal Ministry of Finance confirmed this treatment in its circular of March 6, 2025 on the income tax treatment of certain crypto-assets.

What matters is the moment income reaches you and its value in euros on that very day. Anyone paid out weekly or daily collects a correspondingly large number of individual receipts over the year, which are added up at year end. A platform showing only the closing balance therefore delivers too little for a tax return.

The €256 threshold applies per calendar year and to all services together

Section 22 no. 3 contains a threshold of its own, and the statutory wording stays brief: such income is not subject to income tax if it amounted to less than €256 in the calendar year. Three properties of that figure matter in practice.

First, it is an exemption limit and no allowance. At €255 everything stays tax free; at €256 the full amount becomes taxable, and not merely the part above the line. Second, the limit applies to the calendar year and not to individual platforms; anyone earning €100 at each of three providers lands above it with €300. Third, other income from services in the same year counts towards it, from an occasional brokerage fee for instance.

Losses from such services cannot be offset against salary, nor against capital gains. The law allows them to be set only against income of the same kind from other years.

Swapping a stablecoin is a disposal under section 23 of the Income Tax Act

Beyond the income there is a second level: the token itself. Swapping Bitcoin into USDC, or USDC back into euros, is a disposal for tax purposes under section 23 of the Income Tax Act. If no more than a year lies between acquisition and sale, the gain is taxable; after that it is not. On the stablecoin itself little usually arises, because its price barely moves; on the coin swapped away, often a great deal.

Two points tend to get lost here. Section 23 has a threshold of its own: if total gains from such transactions stay below €1,000 in the calendar year, they remain tax free. And the law extends the one-year period to ten years where an asset is used as a source of income in at least one calendar year.

That second provision unsettled investors who lent or staked their coins for years. In its circular of March 6, 2025 the Federal Ministry of Finance recorded that staking and lending do not extend the one-year period. The income received instead starts a one-year period of its own from the day it is credited. For holders that means a lent stablecoin is free of disposal tax after a year, while the running income from it never is.

Stablecoin interest: a €256 threshold, but no yield from the issuer

The legal position is clearer than the product pages of many providers. Nothing comes out of the token, something does come from a borrower, and the tax office treats the two differently. Three steps bring order to it.

1. Establish who pays the yield. If the terms say lending, earn or savings, you are lending your token to a third party. Whether the platform is authorised for that in Europe can be looked up in our comparison of regulated crypto exchanges.
2. Record every receipt separately. Date, amount and the euro rate on the day of the credit belong in the record, because the €256 limit applies across all platforms together. Which programs write that down automatically is shown in our overview of crypto tax tools and portfolio trackers.
3. Separate the balance from the credit business. What you do not lend does not need to sit with the provider either; self-custody takes the counterparty's default risk out of the equation. The devices for it are in the hardware wallet comparison.

(As of October 20, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)