ECB and EU central banks seek to replace stablecoin bank-deposit reserve rules
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The Facts
- The ECB and EU national central banks recommended ending MiCA’s minimum bank-deposit requirement for stablecoin reserves.
- The recommendation came from the European System of Central Banks, comprising the ECB and 27 EU national central banks.
- MiCA currently requires stablecoin issuers to hold 30% of reserves as bank deposits, rising to 60% for significant issuers.
- The central banks said mandatory stablecoin reserve deposits could make banks’ funding less stable.
- The central banks proposed minimum liquidity requirements for reserve assets maturing within one to five working days.
- The recommendation was submitted in response to a European Commission consultation reviewing MiCA.
- Changing the reserve requirement would require an amendment to the EU’s Markets in Crypto-Assets Regulation.
Context
What is MiCA?
MiCA, or the Markets in Crypto-Assets Regulation, is the European Union’s framework for crypto-assets and related firms. The regulation came into force last year, and the European Commission is reviewing it through a consultation. Investing.com Reuters Euronews English
Why do central banks oppose the bank-deposit requirement?
They say stablecoin-related deposits may be less stable than other bank funding and that redemptions of stablecoins could expose lenders to deposit outflows. BFMTV Reuters Cointelegraph PYMNTS.com
What would replace the deposit threshold?
The central banks propose requiring a minimum share of reserve assets to mature within one to five working days, focusing the rule on liquidity rather than bank-deposit holdings. Investing.com Reuters CoinDesk CryptoSlate
Where Left and Right agree
Left and right largely agree on this one.
- What both sides accept
- Both sides agree MiCA's mandatory bank-deposit quota for stablecoin reserves should be replaced with liquidity requirements tied to how quickly reserve assets mature.
- Where Left and Right differ in emphasis
- Both want the deposit mandate scrapped; one frames it as shielding public banking infrastructure from crypto-linked instability, the other as removing a political quota that overrides market discipline.
How left and right read it
The banking system is public infrastructure ordinary people depend on, so it should not be wired into a volatile private asset class by law. Yet MiCA mandates exactly that, forcing issuers to park 30% of reserves — 60% for significant issuers — in bank deposits, which the ECB and the 27 national central banks warn makes bank funding less stable. Amend it. Short-term liquidity requirements on reserves maturing within one to five working days protect stability without making banks carry crypto's risk.
Forcing stablecoin issuers to park fixed shares of reserves in bank deposits substitutes a political quota for sound risk management, and central banks themselves warn that quota can leave bank funding less stable. A standard geared to how quickly reserve assets mature respects market discipline instead of dictating where money must sit, so any MiCA amendment should replace the deposit mandate with that narrower liquidity test.
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