ECB Scraps Stablecoin Deposit Requirements Amid Regulatory Concerns

The European Central Bank 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 a response to a consultation on the Markets in Crypto-Assets regulations, which came into force last year, the central banks recommended changing the rules 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, which includes the ECB and the 27 national central banks of EU countries, warned that requiring stablecoins to be backed by bank deposits could expose lenders to changes in the stablecoin market and less stable deposits.