EU Regulators Seek Stablecoin Reserve Rules Overhaul

The European Central Bank (ECB) and EU central banks want to change the rules for stablecoin reserves, arguing that large deposits could create liquidity risks for banks. The ECB and EU central banks have called for removing rules requiring at least 30% of reserves, or 60% for significant stablecoins, to be held as bank deposits.

The European System of Central Banks (ESCB) wants to replace these rules with minimum liquidity thresholds for reserve assets maturing within one and five working days. The proposal came in the ESCB's response to the European Commission's review of the Markets in Crypto-Assets Regulation (MiCA).

The central banks pointed out that the existing bank-deposit rules create a direct link between issuers and credit institutions, which could expose banks to liquidity problems if a stablecoin run forces an issuer to rapidly withdraw deposits.