ECB Seeks to Scrap MiCA Stablecoin Reserve Rule

The European Central Bank (ECB) has submitted its formal response to the European Commission's consultation on the Markets in Crypto-Assets regulation, also known as MiCA. The ECB argues that one of MiCA's signature stablecoin rules needs to be scrapped.

The rule in question requires issuers of e-money tokens and asset-referenced tokens to hold a minimum percentage of their reserves in traditional bank deposits. For non-significant tokens, this floor sits at 30%, while for significant tokens, it jumps to 60%. However, the ECB claims that these mandatory deposit requirements expose banks themselves to volatile, potentially flighty deposits.

Instead of fixed deposit percentages, the ECB is proposing a liquidity-focused rule. Under this framework, reserve assets would need to mature within one to five working days. The emphasis shifts from where the money sits to how quickly it can be accessed.