ECB and EU Central Banks Push for Liquidity‑Based Reserve Rules for Stablecoins

The European Central Bank (ECB) and the European System of Central Banks (ESCB) have submitted a formal recommendation to the European Commission, urging a change to the reserve‑asset rules for stablecoins under the Markets in Crypto‑Assets (MiCA) framework.

Current MiCA reserve requirements

MiCA mandates that stablecoin issuers keep at least 30% of their reserves in commercial‑bank deposits. For tokens classified as “significant,” the floor rises to 60%.

Proposed shift to maturity‑based liquidity

The ESCB proposes replacing the fixed‑share rule with minimum proportions of assets that mature within one working day and within five working days. The focus would be on how quickly issuers can access reserves during redemption spikes, rather than on the amount held at banks.

Rationale: preventing a stablecoin‑driven bank run

Central banks argue that large redemptions could force issuers to withdraw sizable deposits from commercial banks, exposing those banks to sudden liquidity stress. Because token‑holder deposits can be withdrawn more rapidly than household deposits, a run on a stablecoin could transmit financial stress to the banking sector.

Industry response

Tether CEO Paolo Ardoino warned in 2024 that MiCA’s deposit floors could create systemic risk, citing a hypothetical €10 billion stablecoin where a 60% deposit requirement would leave insufficient cash for large redemption requests. Tether has largely backed USDT with U.S. Treasury securities rather than European bank deposits, and it has delayed seeking MiCA authorization pending a safer reserve regime.

Regulatory context

The ESCB’s recommendation is part of a broader MiCA review that began with a public consultation in May 2024. The European Commission will consider the feedback when preparing a report required under MiCA Articles 140 and 142, which could lead to legislative amendments.

Comparison with U.S. rules

U.S. stablecoin regulation under the GENIUS Act does not impose fixed deposit percentages. Instead, issuers must hold reserves in cash, insured deposits, short‑term Treasury securities, reverse repurchase agreements, or qualifying money‑market funds, with monthly disclosure requirements.