ECB, EU Cenbanks Seek Stablecoin Deposit Rule Overhaul

The European Central Bank (ECB) and EU central banks are seeking changes to the Markets in Crypto-Assets Regulation's (MiCA) minimum bank deposit requirements for stablecoins.

In a response to the European Commission's review of MiCA, the ECB and EU central banks want to replace the existing rules requiring at least 30% of reserves or 60% for significant stablecoins to be held as bank deposits with new liquidity requirements.

The European System of Central Banks (ESCB) believes that large stablecoin deposits could create liquidity risks for banks, and instead proposes minimum liquidity thresholds for reserve assets maturing within one and five working days.

The ESCB also points to overnight reverse repurchase agreements (repos) and short-term sovereign bonds as alternative instruments issuers could use to achieve liquidity.