Central Banks Seek Stablecoin Rule Overhaul

Europe's central banks are calling for changes to a rule designed to make stablecoins safer. The rule, part of the Markets in Crypto-Assets Regulation (MiCA), requires issuers of non-significant tokens to keep at least 30% of their reserves with EU credit institutions.

The European System of Central Banks (ESCB) wants this fixed minimum removed and instead wants reserve safety to depend on how quickly a token can be redeemed. For official-currency tokens, the rule would require issuers to have at least 20% of their reserves available within one working day and 30% within five days.

This proposed change aims to improve issuer economics by allowing them to meet liquidity requirements with a broader range of assets, including short-term sovereign paper or repo positions. However, critics argue that this could shift risk toward government-debt and funding markets.