ECB, EU Central Banks Propose Changes to MiCA Stablecoin Reserve Rules

MiCA stablecoin reserve rules — The European Central Bank and EU central banks have proposed replacing mandatory bank-deposit requirements for stablecoin reserves under MiCA with new liquidity thresholds, warning the current rules could strain lenders.

The European System of Central Banks (ESCB), in a response published Tuesday, called for removing rules that require at least 30% of reserves (or 60% for significant stablecoins) to be held as bank deposits. The central banks argue this creates a direct link between issuers and credit institutions, exposing banks to liquidity problems if a stablecoin run forces rapid deposit withdrawals.

Instead, the ESCB backs minimum liquidity thresholds for reserve assets maturing within one and five working days. It pointed to instruments like overnight reverse repurchase agreements and short-term sovereign bonds as alternatives issuers could use to meet liquidity needs.

The proposal echoes long-standing industry concerns. Tether CEO Paolo Ardoino, who warned about the risks of the bank-deposit clause as early as 2024, commented on the development, noting Tether refused an EU license over the same rule.