European Central Bank seeks to scrap MiCA’s stablecoin reserve rule

The European Central Bank just told the European Commission that one of MiCA’s signature stablecoin rules needs to go. The mandatory requirement forcing stablecoin issuers to park a large chunk of their reserves in bank deposits, the ECB argues, is creating more problems than it solves.

On September 22, the ECB and the broader European System of Central Banks (ESCB) submitted their formal response to the Commission’s consultation on the Markets in Crypto-Assets regulation. Their central recommendation: eliminate the percentage-based bank-deposit mandate entirely and replace it with something built around liquidity instead of arbitrary thresholds.

What the current rules actually require

Under MiCA as it stands today, issuers of e-money tokens (EMTs) and asset-referenced tokens (ARTs) must hold a minimum percentage of their reserves in traditional bank deposits. For tokens classified as “non-significant,” that floor sits at 30%. For “significant” tokens, those with larger market footprints, the number jumps to 60%.

The ECB’s counterargument is that mandatory deposit requirements expose banks themselves to volatile, potentially flighty deposits. If a stablecoin faces a redemption wave, those deposits could vanish from a bank’s balance sheet overnight, creating exactly the kind of instability regulators were trying to prevent.

Instead of fixed deposit percentages, the ECB is proposing a liquidity-focused rule. Under this framework, reserve assets would need to mature within one to five working days. The emphasis shifts from where the money sits to how quickly it can be accessed.

Why this matters for MiCA 2.0

The original MiCA provisions for stablecoins became fully applicable during 2024 and 2025, making Europe the first major jurisdiction to impose a comprehensive regulatory framework on crypto assets. The bank-deposit rule has been a persistent sore spot.

Industry groups like Bruegel and Blockchain for Europe had already flagged concerns about the concentration risk that mandatory bank deposits create. Their argument: forcing issuers to concentrate reserves in bank deposits doesn’t just limit operational flexibility, it creates a systemic vulnerability by tying stablecoin stability to individual banking relationships.

The ESCB’s response also raised a separate but related concern: enforcement gaps. Central banks flagged significant challenges in ensuring compliance across the EU, particularly when non-compliant platforms operating outside European borders can still reach EU users.

How Europe’s approach compares

The bank-deposit mandate has been one of the features distinguishing MiCA from other regulatory frameworks around the world. The US GENIUS Act, for example, takes a different approach to stablecoin reserves, without imposing the same rigid deposit-percentage requirements that MiCA currently enforces.

A 60% bank-deposit requirement for significant tokens represents a meaningful constraint on how issuers can manage and optimize their reserve portfolios. Money sitting in bank deposits generally yields less than money deployed in short-duration government securities or other high-quality liquid assets.

It’s worth noting that the ECB’s response treated the issue entirely in macro-financial terms. No specific stablecoin issuers or tokens were singled out.

What to watch next

For stablecoin issuers eyeing the European market, a shift from deposit-percentage mandates to liquidity-maturity requirements would lower the operational burden of compliance and potentially improve the yield issuers can generate on their reserves. For a significant stablecoin issuer holding billions in reserves, the gap between bank deposit rates and short-duration government bond yields can translate to hundreds of millions in annual revenue.

The enforcement challenges the ESCB flagged deserve attention too. Even the most thoughtfully designed reserve requirements don’t accomplish much if offshore platforms can serve EU users without complying.