ECB Seeks Stablecoin Rule Change Amid Liquidity Risks

The European Central Bank (ECB) and all 27 EU national central banks are pushing for changes to Europe's stablecoin rules. The ECB wants issuers to hold less than 60% of their reserves as bank deposits, citing that this could make bank deposits unstable.

The current rule, part of the Markets in Crypto-Assets (MiCA) framework, requires major stablecoin issuers to keep at least 60% of their reserves as bank deposits. However, the ECB argues that this requirement could put banks at risk when crypto markets fall and users redeem their tokens.

The ECB wants to require a minimum share of reserves to be held in assets that mature within one to five working days. This would give stablecoin issuers access to assets that can be converted or settled quickly when users redeem their tokens, reducing the amount of funding directly tied to traditional banks.