EU Central Banks Ditch Stablecoin Deposit Rule Amid Financial Stability Concerns

The European Central Bank (ECB) and other EU central banks have recommended that stablecoin issuers be exempt from holding a minimum proportion of their reserve assets as bank deposits. The current requirement is to hold 30% of reserves as bank deposits or 60% for major issuers, but the ECB and national central banks suggest dropping this rule.

This recommendation was made in response to a consultation on the MiCA regulations, which came into force last year. Stablecoin issuers could alter banks' funding structures by replacing stable retail deposits with less stable deposits from stablecoin issuers, according to the central banks.

The ECB and national central banks also expressed concerns about multi-issuance stablecoin models, where global stablecoin firms treat tokens issued in the EU as interchangeable with those outside the bloc. They recommend including a comprehensive framework of safeguards if multi-issuance is allowed in future.