ECB Central Banks Urge Overhaul of MiCA’s Stablecoin Deposit Rules

The European System of Central Banks (ESCB), which includes the European Central Bank, has formally asked the European Commission to scrap MiCA’s mandatory bank-deposit thresholds for stablecoin reserves and replace them with liquidity requirements tied to how quickly reserve assets can be turned into cash. The response, published Tuesday, September 22, 2026, as part of the Commission’s ongoing review of the Markets in Crypto-Assets regulation, could reshape how every euro-denominated stablecoin issuer in the bloc manages its reserves.

What MiCA Currently Requires

Under the rules in force today, stablecoin issuers classified as “standard” must hold at least 30% of their reserves as deposits in banks, while issuers deemed “significant” — typically those with larger circulation or systemic footprint — must hold at least 60%. The logic was straightforward: bank deposits are simple, familiar, and were assumed to be readily accessible if holders demanded redemptions all at once.

The ESCB’s submission argues that this assumption does not hold up well in practice. Large pools of stablecoin-linked deposits concentrated in a small number of banks create a liquidity risk that runs in both directions — banks lend out a share of the deposits they receive, which means the cash is not actually sitting idle waiting for a redemption wave. If a stablecoin issuer needed to pull billions of euros out quickly, the bank itself could be strained.

This is not a theoretical worry. Tether CEO Paolo Ardoino laid out the mechanics in 2024 with a simple example: a stablecoin backed by 10 billion euros in reserves would, under the 60% rule, need to park 6 billion euros in bank deposits. If that bank lent out 90% of what it received, as banks routinely do, only 600 million euros would remain immediately accessible. The gap between what regulation assumes is available and what is actually liquid is, in Ardoino’s telling, exactly where a crisis could form.

The Alternative on the Table

Instead of fixed deposit ratios, the ESCB is proposing minimum liquidity requirements based on the maturity of the underlying assets — essentially, how fast reserves can be converted to cash without needing a bank intermediary. This approach echoes draft rules the European Banking Authority (EBA) published in 2024, which would have required significant stablecoins to hold 40% of reserves in assets maturing within one working day and 60% within five working days, with lighter thresholds of 20% and 30%, respectively, for non-significant stablecoins.

The distinction matters because maturity-based liquidity rules do not funnel money into any specific type of institution. They instead focus on the actual redemption capacity of the reserve pool, whether that pool sits in short-term government bills, overnight repos, or bank deposits. For issuers, this could mean more flexibility in how reserves are structured, provided they can demonstrate the assets are genuinely liquid on a short time horizon.

The ESCB’s reasoning also draws directly on a real-world precedent: the March 2023 collapse of Silicon Valley Bank, which triggered a run on Circle’s USDC after Circle disclosed that $3.3 billion of its reserves were held at that single bank. The episode briefly knocked USDC off its dollar peg and became a reference point for regulators worldwide on how concentrated bank exposure can transmit stress from the banking sector directly into a stablecoin’s stability, rather than protecting it.

Why Issuers Are Watching Closely

Tether has previously cited MiCA’s deposit requirement as a reason for not pursuing a license to operate in the European Union, leaving the bloc’s stablecoin market to euro-denominated competitors that have opted into the framework. A shift away from fixed bank-deposit ratios toward liquidity-based thresholds could remove one of the concrete objections large issuers have raised, potentially opening the door to broader participation in the EU market — though nothing in the ESCB’s proposal guarantees that outcome, and any change would still need to move through the Commission’s formal review process.

For banks, the proposal cuts the other way: it would reduce their exposure to the risk of holding concentrated, potentially volatile stablecoin-linked deposits, addressing a concern that sits at the intersection of crypto markets and traditional banking stability. This is consistent with a broader pattern of the ECB positioning itself carefully at that intersection — the central bank recently launched a separate initiative called Pontes, aimed at settling tokenized assets in euros without relying on stablecoins at all, and has structured itself to act as both operator and buyer in a new tokenized bond system.

What happens next depends on the European Commission, which must weigh the ESCB’s input alongside the EBA’s earlier draft thresholds and industry feedback before deciding whether to revise MiCA’s reserve requirements. Observers should watch whether the Commission adopts liquidity-based thresholds close to the EBA’s 2024 figures, whether any transition period is proposed for issuers already operating under the current deposit rules, and whether large non-EU issuers like Tether signal renewed interest in EU licensing if the rules change. The debate also arrives as U.S. regulators continue to improvise crypto rules piece by piece in the absence of comprehensive legislation, a contrast that underscores how differently the EU and US are approaching the same underlying question of reserve safety.

Source: Cointelegraph

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