ECB Ditches Stablecoin Deposit Rule Amid Financial Stability Concerns

The European System of Central Banks (ESCB) has suggested dropping the rule that requires stablecoin issuers to hold at least 30% of their reserve assets as bank deposits. This recommendation is part of a response to a consultation on the MiCA regulations, which came into force last year.

The ESCB argues that holding reserves as bank deposits can alter banks' funding structures by replacing relatively stable retail deposits with less stable deposits from stablecoin issuers.

The central banks also expressed concerns about multi-issuance stablecoin models, where global stablecoin firms treat tokens issued in the EU as interchangeable with those outside the bloc. They suggested that if such models are allowed in the future, MiCA rules should be updated to include a comprehensive framework of safeguards.