EU Central Banks Suggest Dropping Stablecoin Deposit Rule

The European Central Bank (ECB) and other EU central banks have suggested dropping the requirement for stablecoin issuers to hold a minimum proportion of their reserve assets as bank deposits.

This recommendation is part of a response to a consultation on the MiCA regulations, which are a set of EU-wide crypto rules that came into force last year.

The current rule requires stablecoin issuers to hold 30% of their reserves as bank deposits or 60% for major issuers. The central banks have proposed changing this requirement to specify a minimum percentage held in assets that mature within one and five working days.

This change is intended to reduce the risk of stablecoins altering banks' funding structures by replacing relatively stable retail deposits with less stable deposits from stablecoin issuers, which are more sensitive to market conditions.