The European Central Bank and EU national central banks want stablecoin issuers released from a MiCA rule that locks up to 60% of reserves in bank deposits.
Key Points:
- EU central banks asked Brussels to delete MiCA's 30% and 60% minimum bank-deposit quotas for stablecoin reserves.
- They want liquidity floors instead, measured by how much of a reserve matures within one and five working days.
- The paper warns that a run on a large token could pull deposits out of a bank fast enough to strain it.
ECB MiCA Reserve Proposal
The European System of Central Banks, which pairs the ECB with 27 national central banks, filed the recommendation Tuesday, and it lands squarely on one of the regime's signature safeguards. The submission came in the group's answer to the European Commission's review of the Markets in Crypto-Assets Regulation, the rulebook that has governed token issuers across the bloc since last year. Issuers now keep at least 30% of reserves as bank deposits, or 60% for significant tokens.
The central banks want those quotas gone.
They backed minimum shares of reserve assets maturing within one and five working days instead, citing draft European Banking Authority standards as a starting point. Those drafts set floors of 40% in one-day assets and 60% in five-day assets for significant tokens, and 20% and 30% for smaller ones. Overnight reverse repurchase agreements and short-term sovereign bonds could supply the same cushion, the group said, without routing the money through the banking system at all.
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Stablecoin Bank Run Risks
The deposit rule "creates a direct link between issuers and credit institutions," the paper said. A run on a token would force its issuer to pull that cash fast, and any bank leaning on the funding could face liquidity strain of its own.
Contagion has already run the other way. In March 2023, trouble at Silicon Valley Bank triggered a run on USD Coin (USDC), whose issuer Circle held reserves there. Issuer deposits are also flightier than the household savings they displace, and they earn less than the short-term government debt issuers could hold instead, one analysis noted.
The paper pressed a second objection, this time to multi-issuance, the model under which global firms treat tokens minted inside the bloc as interchangeable with those minted outside it. Supervisors also face "material challenges" enforcing MiCA, the central banks said, because firms that ignore the licensing regime still reach customers inside the bloc, leaving investors exposed.
ECB Stablecoin Warnings
Pressure from Frankfurt has been building all year. An ECB working paper in March found that wider stablecoin use could drain deposits and curb lending, though euro area deposits near 17 trillion euros still dwarf a global stablecoin market of roughly $300 billion. On Monday the ECB launched Pontes, a settlement system that lets institutions move tokenized assets in central bank money rather than private tokens.
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