the MiCA Interest Ban Explained

Since August 31, 2026, another card offer has been advertising two numbers that stand out when you put them side by side: up to 10 percent cashback in USDT on every purchase, and on top of that up to 7 percent a year on the USDT balance you keep available for the card. The short answer to why you will not find terms like these at any provider licensed in the EU sits in a single article of the European crypto regulation. Article 50 MiCAR bars licensed providers from paying you anything for holding a regulated stablecoin. This piece sets out what that article says word for word, what the ban covers, where its limit runs, and what you can draw from it when you judge a card offer.

USDT cashback and 7 percent on your balance: what was announced on August 31, 2026

The trading platform MEXC presented a payment card on the Visa network on August 31, 2026, the MEXC Global Card. According to the company it is virtual to begin with, can be added to Apple Pay and Google Pay, and is funded from a USDT balance. The trade publication crypto.news, which reviewed the announcement the same day at around 19:12 UTC, names three tiers: 4 percent cashback with a monthly cap of 100 USDT, 6 percent with a cap of 300 USDT, and 10 percent with a cap of 800 USDT. Which tier applies to you depends, on that account, on a provider status score fed by trading volume, subscriptions and completed tasks.

Added to that are the terms the company names in its own release: no issuance fee, no annual fee, no top-up fee, no purchase fee until September 30, 2026 and a rate from 1 percent after that. The limits are 80,000 USDT per transaction and one million USDT per day. Before you apply, the provider requires enhanced identity verification including proof of address. And finally the offer this piece is mainly concerned with: cardholders can pay USDT into a flexible savings product with no lock-up period, advertised at up to 7 percent a year.

That cards of this kind are becoming more common is a matter of record. crypto.news puts the monthly payment volume of crypto cards for July 2026 at 759 million dollars, two and a half times the year-earlier figure, and attributes 84 percent of the recorded volume to the two dollar stablecoins USDC and USDT. If you want an overview of the models actually available in Europe, you will find one in our comparison of crypto credit cards; we broke down the fee structures of the individual providers on August 14, 2026 in a separate price and feature comparison.

Article 50 MiCAR: the ban on interest for e-money tokens word for word

Regulation (EU) 2023/1114 on markets in crypto-assets, MiCAR for short, is the legal framework under which crypto service providers operate in the European Union. Its Article 50 is headed Prohibition of granting interest and consists of three paragraphs. Paragraph 1 reads: By way of derogation from Article 12 of Directive 2009/110/EC, issuers of e-money tokens shall not grant interest in relation to e-money tokens.

Paragraph 2 extends that to service providers, meaning exchanges, custodians and card issuers: Crypto-asset service providers shall not grant interest when providing crypto-asset services related to e-money tokens. A licensed provider may therefore pay nothing even where it does not issue the token at all and merely holds or trades it. You can read the full text of the regulation at EUR-Lex.

E-money tokens explained: what the EU counts as a regulated stablecoin

Under MiCAR, an e-money token is a crypto-asset intended to serve as a means of exchange whose value is kept stable by referencing exactly one official currency. A token designed to track one euro or one dollar therefore falls into this category. It is to be distinguished from the asset-referenced token, which ties its value to a basket of several currencies, commodities or other crypto-assets.

One point matters for understanding the ban: the rules in Article 50 attach to regulated status. They address issuers holding an authorisation in the Union, and service providers authorised under Article 59 MiCAR. A token not authorised in the EU as an e-money token at all is not directly caught by the provision. The classification of the case at hand turns on precisely that, and this piece returns to it further down.

Paragraph 3 is the real lever: why rewards and bonuses count as interest

Reading paragraphs 1 and 2 alone, you might think the ban could be sidestepped by using a different label. Paragraph 3 rules that out. It provides that, for the purposes of the two preceding paragraphs, any remuneration or other benefit related to the length of time during which a holder of an e-money token holds that e-money token is treated as interest. And it expressly includes net compensation and discounts with an effect equivalent to interest, irrespective of whether they come directly from the issuer or are granted by third parties.

Two consequences follow. First, the name is irrelevant. Whether an offer is called interest, yield, reward, bonus or flexible savings product does not decide whether Article 50 applies. What counts is whether the benefit is tied to the holding period. Second, the ban cannot be dismantled by splitting the work up. A licensed provider cannot outsource the payment to a partner firm and then argue that it pays nothing itself.

For judging a card offer, that yields a usable dividing line. Cashback tied to turnover, meaning to the act of paying itself, is not remuneration for a holding period and does not fall under paragraph 3 on the wording. Interest on the balance sitting on the card or in the associated savings product is exactly the opposite. It is paid solely because the token stays put.

Recital 68: why the EU prohibits interest on stablecoins in the first place

The legislator wrote down its own intention. Recital 68 of the regulation gives the purpose as reducing the risk of e-money tokens being used as a store of value. Behind that sits a monetary consideration: an interest-bearing dollar token would be a savings product in a foreign currency, scalable at will. If large sums migrate out of bank deposits into such tokens, deposit volume shifts out of the supervised banking system, and in a crisis a rush to redeem could build that no deposit guarantee scheme covers.

On this logic a stablecoin is meant to be a means of payment and not an interest product. That explains why the ban is drawn so widely and why it knows no de minimis threshold. There is no rate below which paying interest on an e-money token would be permitted.

Article 40 MiCAR: the same rule for asset-referenced tokens

To leave no gap, the regulation states the same bar a second time. Article 40 carries the same heading and prohibits issuers and service providers from granting interest in connection with asset-referenced tokens. The broad definition applies there too: any remuneration related to the holding period counts as interest.

In practice that means there is no stablecoin category inside the authorised European framework on which a provider would be allowed to pay you running interest. Anyone who sees such an offer in the EU should therefore first ask which token is meant and what supervisory status the provider holds.

USDT and EU authorisation: why this stablecoin does not fall under Article 50

This is where the matter gets more precise than the headlines on many articles suggest. Article 50 captures e-money tokens, meaning tokens with an authorisation under MiCAR. USDT does not have that authorisation. Its issuer Tether has not applied for it, on the consistent account of several trade publications, and MiCA-licensed trading venues in the European Economic Area have not listed the token in their trading pairs since 2026. Kraken, Binance and Bitpanda have restructured their European offerings accordingly.

Two things follow. First, the interest ban in Article 50 does not apply directly to an offer built on USDT, because the connecting factor is missing. Second, and this is the genuinely useful insight, a rule of thumb for practice emerges: a provider operating inside the European framework cannot offer you running interest on a regulated stablecoin. If such an offer reaches you anyway, then either the provider is working outside that framework, or the token is, or both.

What is documented and what remains assessment

The text of the regulation is documented. Article 40, Article 50 and recital 68 stand in the Official Journal and are quoted verbatim above. The terms of the card are documented as well, so far as the company itself communicated them and crypto.news traced them. And it is documented that USDT holds no MiCA authorisation as an e-money token.

Assessment is the conclusion this piece draws from that, namely that a yield promise on a dollar stablecoin sits systematically outside the authorised European framework. That conclusion follows from the wording, but it is not a finding about any individual company. Whether a particular provider may operate in Germany is decided not by this piece but by the competent supervisor. We assert nothing on that point, and we did not obtain a statement from the company.

One fact belongs in this context because it is public, official and still retrievable today. Germany’s Federal Financial Supervisory Authority published a consumer notice on October 17, 2023 headed mexc.com: BaFin is investigating MEXC. It states: The financial supervisor BaFin warns against offers from MEXC. According to its findings, the company offers financial services without authorisation on its website mexc.com. The notice is available in full from BaFin.

What a notice of this kind does and does not say

Placing this information calls for care. The notice dates from October 2023 and describes the supervisor’s state of knowledge at that time. It refers to the website as a whole and not to the card, which did not yet exist. Whether anything has changed since, we cannot establish, and an ongoing procedure is not a court ruling. What the notice does deliver is something else, and more valuable to you: it is a data point you can look up yourself before you upload identity documents. How to read a warning of this kind is something we described in detail using a wallet app as the example, in our piece on the BaFin warning on NC Wallet.

Check the authorisation yourself: company database and MiCA register

The exercise takes a few minutes and works the same way with any provider. BaFin maintains a company database listing authorised institutions and crypto-asset service providers together with the scope of their permission. Alongside it, the supervisor publishes its consumer notices on unauthorised business, which you can search by name and domain. At European level, ESMA maintains a register of authorised crypto-asset service providers as well as a list of non-compliant providers.

Two pitfalls are worth knowing, and we have counted both already. First, the European warning list is incomplete: in our review on August 16, 2026, 165 of 167 entries came from Italy and BaFin was not represented at all, as our piece on the EU warning list for crypto providers shows. A missing entry is therefore no seal of approval. Second, an authorisation is not the same as a licence to run a trading venue: our review of the MiCA register on August 6, 2026 found that only 21 of 329 authorisations cover the operation of a trading platform at all. The positive list is the better test, and anyone who wants to stay with supervised providers from the outset will find the selection in our overview of regulated crypto exchanges.

Cashback tiers, caps and status points: what the percentage is worth in practice

A double-digit cashback rate sounds like a lot and in practice is almost always less, because three limits work together. The first is the monthly cap. 10 percent with a cap of 800 USDT means the full rate only works up to monthly spending of 8,000 USDT; every euro beyond that brings nothing. On the entry tier with 4 percent and a cap of 100 USDT, the limit is already reached at 2,500 USDT of spending.

The second limit is the tier logic. On the account given by crypto.news, the high rate hangs on a status score fed by trading volume, subscriptions and completed tasks. Anyone who uses the card only to pay and does not trade therefore lands structurally on the bottom tier. The third limit is the delay: the tier is determined on the last day of the month, payout follows on the 15th of the month after, and cancelled purchases are netted off. Certain merchant categories are excluded from cashback altogether.

This mechanism is standard across the industry and no special case. In our price and feature comparison of August 14, 2026, every card model examined carried caps, tiers or a link to staking. The rate on a provider’s landing page therefore says little about what arrives in your account at the end of the year.

Visa exchange rate and foreign currency fee: the costs the percentage does not contain

A card funded from a dollar stablecoin, and a purchase you pay for in euros, inevitably produce a currency conversion. On the account given by crypto.news, the card network’s exchange rates apply, the provider itself adds nothing, but foreign currency fees under the card network’s rules may arise. These costs rarely appear next to the cashback rate, yet they bite on every single purchase.

Then there is the purchase fee itself. According to the company it is waived until September 30, 2026 and starts at 1 percent after that. If you want to estimate the real saving, you work backwards: purchase fee and conversion costs come off the cashback rate, and the monthly cap limits the result. 10 percent on the advertising banner regularly becomes a low single-digit figure that way.

Tax: why every card payment made from crypto can be a disposal

This point is often overlooked with card offers, and it can eat up the cashback in arithmetic terms. If you pay with a card funded from a crypto holding, that holding is given away at that moment. For tax purposes this is a disposal. Under Section 23(1) sentence 1 no. 2 of the German Income Tax Act, disposals of other assets count as private disposal transactions where no more than one year lies between acquisition and disposal. For the total of such transactions, Section 23(3) of the Act provides an exemption threshold.

In practice that means anyone paying frequently with such a card generates many small events, individually unremarkable and collectively in need of explanation. With a dollar stablecoin the gain usually stays small, because the token is meant to track a fixed reference value, but exchange rate movements between dollar and euro feed through. The cashback itself is a further event with a classification of its own. How to record such events cleanly, without reconstructing hundreds of lines by hand at year end, is shown in our overview of crypto tax tools and portfolio trackers. This piece is no substitute for tax advice; classifying a specific case belongs in expert hands.

Excluded countries and identity verification: what happens before you apply

On the account given by crypto.news, the card is not available to people in the United States or in China, India, Indonesia, Turkey and Russia. Germany is not on that list. Before you apply, the provider requires enhanced identity verification including proof of address.

What you know before you upload your identity documents

That order of events is the reason the check described in the section before last should happen before you apply, not after. Identity verification means that a photograph of your ID, your address and your date of birth sit with a company. This data cannot be recalled, and as the data leaks at wallet providers in August 2026 showed, it is the basis for very well-targeted fraud attempts. Where a card balance actually sits in technical terms, and which models exist for it, we broke down on August 30, 2026 in our piece on the card balance behind crypto cards. If you are instead considering simply holding part of your position, you will find the market picture in our Bitcoin price prediction.

Checking a USDT cashback card: what you take away

Three steps, in this order, before you apply for a card with stablecoin interest.

1. Look up the provider’s status before you upload any data. Search the name and the domain in BaFin’s company database and in its consumer notices, then in the European register of authorised service providers. A missing entry on a warning list proves nothing; the positive list is what counts. If you want to stay with supervised providers from the start, choose from the overview of regulated crypto exchanges.
2. Separate the yield part from the payment part. Cashback on spending and interest on a balance are two different promises with different legal footing. Inside the authorised European framework, nobody may pay you running interest on a regulated stablecoin. Also scale the cashback down to the cap and deduct the purchase fee and the conversion cost before you set it next to the terms in the comparison of crypto credit cards.
3. Set up your record-keeping before the first payment runs. Every card payment from a crypto holding is a separate event with a date, a quantity and a euro value. Set up the recording while it is a matter of a few lines, not in the following year; the tools for it are in the overview of crypto tax tools and portfolio trackers.

(As of August 31, 2026. This article is not investment advice. Prices and fee structures change; check the terms with the provider before you buy.)