ECB, EU Central Banks Oppose Stablecoin Bank Deposit Rule

The European Central Bank (ECB) and other EU central banks have expressed opposition to a rule that would require stablecoin issuers to hold a minimum proportion of their reserve assets as bank deposits.

In a response to a consultation on the MiCA regulations, which came into force last year, the ECB and national central banks recommended changing the requirement from 60% of reserves held in bank deposits to instead requiring a minimum percentage of token reserves held in assets that mature within one to five working days.

The central banks cited concerns that the current rule could leave lenders exposed to changes in the stablecoin market and less sticky deposits.

Additionally, they noted that European regulators are facing challenges in enforcing the bloc's crypto regulations due to non-compliant companies still having access to EU customers, creating investor protection concerns.