EU Central Banks Oppose Stablecoin Bank Deposit Rule

The European Central Bank (ECB) and other EU central banks have spoken out against a rule requiring stablecoin issuers to hold at least 30% of their reserve assets as bank deposits. The rule, part of the MiCA regulations, was intended to ensure that stablecoins remain pegged to a currency, but the central banks argue it could lead to instability.

The ECB and other central banks expressed concerns in a response to a consultation on the MiCA regulations. They recommended changing the rules to drop the requirement for bank deposits and instead specify a minimum percentage of assets that mature within one to five working days.

The central banks also doubled down on warnings about multi-issuance stablecoin models, which allow global firms to treat tokens issued in the EU as interchangeable with those outside the bloc. They argued that these models pose financial stability risks and are not allowed under current rules.