ECB Opposes Stablecoin Reserve Requirements Amid Market Risks

The European Central Bank (ECB) and other European Union central banks have spoken out against requiring stablecoin issuers to hold a minimum portion of their reserve assets as bank deposits.

In a response to a consultation on the Markets in Crypto-Assets (MiCA) regulations, the ECB warned that such requirements could expose lenders to changes in the stablecoin market and less stable deposits.

The European System of Central Banks, which includes the ECB and 27 national central banks of EU countries, recommended changing MiCA to require a minimum percentage of token reserves be held in assets that mature within one and five working days.

This would replace the current requirement for major stablecoin issuers to hold 60% of their reserves as bank deposits.