ECB and Central Banks Push for MiCA Rule Change Over Stablecoin Reserve Requirements

The European Central Bank (ECB) and 27 national central banks have asked the European Commission to amend a rule in the Markets in Crypto-Assets (MiCA) regulation that requires significant stablecoin issuers to hold at least 60% of their reserves in bank deposits. This move comes after Tether, one of the largest stablecoin issuers, refused an EU license due to this specific rule. According to the ECB and national central banks, holding such a large portion of reserves in bank deposits poses a risk to bank funding.

Instead, they propose that significant stablecoin issuers be required to hold at least 30% of their reserves in assets maturing within one to five working days. This change would aim to mitigate the potential strain on banks and improve enforcement of the rules. The consultation for this proposal closes on September 30.

Tether's CEO, Paolo Ardoino, has argued that the current rule makes tokens less safe due to EU deposit insurance limits of €100,000. He stated that when MiCA becomes safer for consumers and stablecoin issuers, Tether might reconsider obtaining an EU license.