ECB Seeks to Ditch Bank Deposit Rule for Stablecoin Reserves

The European Central Bank (ECB) and EU national central banks have requested that stablecoin issuers be exempt from a Markets in Crypto-Assets (MiCA) rule that requires up to 60% of reserves to be held as bank deposits.

Currently, issuers must keep at least 30% of their reserves as bank deposits or 60% for significant tokens. The central banks want these quotas removed and instead implement liquidity floors measured by how much of a reserve matures within one and five working days.

This move is aimed at preventing a 'run on' a large token, which could potentially pull deposits out of a bank quickly enough to strain it. The ECB has been increasing pressure on stablecoin issuers throughout the year, with an earlier paper warning that wider use could drain deposits and curb lending.

The central banks also raised concerns about multi-issuance, where global firms treat tokens minted inside the bloc as interchangeable with those minted outside it. Supervisors face 'material challenges' enforcing MiCA due to firms ignoring the licensing regime but still reaching customers within the bloc.