ECB Seeks Stablecoin Reserve Overhaul Amid Redeployment Fears
The European Central Bank (ECB) has recommended changes to the reserve requirements for stablecoins under the Markets in Crypto-Assets (MiCA) framework. The current requirement is that regular stablecoin issuers hold at least 30% of their reserves in commercial bank deposits, which rises to 60% for significant stablecoins.
The ECB and EU national central banks argue that this structure could transmit stress from stablecoins to commercial lenders during large redemptions. This could expose banks to a stablecoin run, where token holders seek quick withdrawals.
Tether CEO Paolo Ardoino had previously warned about the risks of MiCA's reserve structure in 2024, saying it could create 'additional systemic risks in Europe' instead of reducing them. He argued that issuers should be allowed to keep all reserves in Treasury bills, which would ensure their return to the issuer following a bank failure.
The ECB's recommendation is part of the European Commission's review of MiCA, which began with a public consultation in May and accepted responses through August. The review aims to assess whether MiCA remains suitable after changes in digital-asset markets and international regulation.