ECB Opposes Stablecoin Reserve Requirements Amid Regulatory Challenges

The European Central Bank (ECB) and other EU central banks have expressed opposition to requiring stablecoin issuers to hold a minimum portion of their reserve assets as bank deposits. In response to a consultation on the Markets in Crypto-Assets regulations, the ECB recommended changing MiCA to require a minimum percentage of token reserves be held in assets that mature within one and five working days.

This would replace the current requirement for major stablecoin issuers to hold 60% of their reserves as bank deposits. The European System of Central Banks also warned that such requirements could expose lenders to changes in the stablecoin market and less stable deposits.

The central banks also highlighted material challenges in enforcing the bloc's crypto regulations, citing non-compliant crypto companies continuing to access EU customers, which creates investor protection concerns.