ECB, EU cenbanks seek changes in MiCA’s minimum bank deposit for stablecoins

The European System of Central Banks (ESCB), which includes the European Central Bank, has called for changes to the Markets in Crypto-Assets Regulation (MiCA) that would remove fixed bank-deposit requirements for stablecoin reserve assets. In its response to the European Commission’s MiCA review, published Tuesday, the ESCB said the current rule — which requires at least 30% of reserves to be held as bank deposits and 60% for significant stablecoins — creates a direct link between stablecoin issuers and commercial banks. The ESCB argued that such a link could expose banks to liquidity risk if a stablecoin issuer faced a run and needed to withdraw deposits quickly. To address that concern, the central banks recommended replacing the bank-deposit thresholds with minimum liquidity requirements based on asset maturities, targeting amounts that mature within one and five working days. As concrete examples, the ESCB pointed to draft requirements drafted by the European Banking Authority in 2024, which would require significant stablecoins to hold at least 40% of reserves in assets maturing within one working day and 60% within five working days; for non-significant tokens, the draft set thresholds at 20% and 30%, respectively. The ESCB said issuers could meet liquidity needs using instruments such as overnight repos and short-term sovereign bonds rather than relying heavily on bank deposits. Separately, the ESCB raised enforcement concerns about MiCA, warning that non-compliant crypto firms might still be able to reach EU customers despite the bloc’s licensing framework. The comment points to potential gaps between the regulation’s rules and the practical ability to prevent unlicensed market access, an issue the central banks said presents material challenges for effective oversight.