EU Tightens Noose on Stablecoins as Central Banks Push for Stricter Oversight

European central banks are urging the European Union to tighten crypto rules in the Markets in Crypto-Assets Regulation (MiCA) review. The proposal targets stablecoins, foreign-currency tokens, staking, and broader crypto firm oversight to boost market security and supervision.

The European System of Central Banks wants regulators to strengthen oversight across the rapidly expanding digital-asset market. This could reshape how stablecoin issuers manage reserves and compete within Europe.

Central banks want to remove MiCA's requirement for issuers to keep 30% to 60% of reserves in bank deposits. Instead, issuers could hold more highly liquid assets, including Treasury bills and repurchase agreements.