EBA and ECB Weigh in on MiCA Review: Stablecoin Reforms Top Agenda

The European Banking Authority (EBA) and the European Central Bank (ECB) have published their responses to the European Commission's consultation on reviewing the Markets in Crypto-Assets Regulation (MiCA). Both authorities agree that MiCA's boundaries with other EU financial laws need sharper delineation, but not expansion.

The EBA recommends keeping tokenized financial instruments outside of MiCA and governed by MiFID/MiFIR. Departing from this would complicate authorisation scope, collateral eligibility, and prudential treatment of exposures to crypto-assets under BCBS SCO60. The ECB also takes the same view, stating that extending MiCA to all tokenised assets 'would not be the most appropriate way' to achieve legal certainty.

The authorities focus on stablecoins, suggesting replacing the fixed minimum-deposit requirement with risk-sensitive liquidity buckets. Both recommend a cost-benefit analysis of reducing the percentage and using high-quality and liquid reserve assets. The EBA suggests introducing a discretionary carve-out right for regulators requiring issuance through an electronic money institution subsidiary.