EU Regulators Strengthen Stablecoin Oversight, Reject Expansion of MiCA

The European Banking Authority (EBA) and the European Central Bank (ECB) have responded to the European Commission's targeted consultation on reviewing the Markets in Crypto-Assets Regulation (MiCA). The authorities agree that MiCA's boundary with EU financial law needs sharper delineation, but not expansion. They recommend that tokenised financial instruments remain outside of MiCA and be governed by existing regulations.

The EBA and ECB also emphasize the need for clarity on rules concerning stablecoins. They suggest replacing fixed minimum-deposit requirements with risk-sensitive liquidity buckets and propose removing the requirement for a bank-deposit floor. The authorities also flag concerns about credit institutions issuing stablecoins through electronic money institution subsidiaries, instead recommending supervisory discretion.

Both the EBA and ECB call for maintaining the prohibition on offering interest or yield on stablecoins. They also highlight the need for clarification on redemption procedures, significance criteria, and third-country multi-issuer schemes. The authorities recommend a dedicated crisis management toolkit for significant issuers and support transferring authorization and supervision of crypto-asset service providers (CASPs) from national regulators to ESMA.