ECB and EU Central Banks Push to Replace MiCA Stablecoin Bank Deposit Rules with Liquidity Thresholds

The European Central Bank and other EU central banks are calling for a fundamental shift in how stablecoin reserves are managed under the Markets in Crypto-Assets Regulation (MiCA). In a formal response published Tuesday to the European Commission's review of MiCA, the European System of Central Banks (ESCB) urged regulators to replace mandatory bank-deposit thresholds with minimum liquidity requirements, warning that large stablecoin deposits could create systemic risks for lenders.

Under current MiCA rules, stablecoin issuers must hold at least 30% of their reserves as bank deposits, or 60% for issuers of significant stablecoins. The ESCB argued that this mandate creates a direct link between issuers and credit institutions, potentially exposing banks to liquidity strain if a sudden stablecoin run forces issuers to withdraw deposits en masse. Instead, the central banks endorsed liquidity thresholds requiring reserve assets to mature within one and five working days, citing draft rules from the European Banking Authority published in 2024.

Under those proposed thresholds, significant stablecoins would need at least 40% of reserves in assets maturing within one working day and 60% within five working days, while non-significant tokens would face lower thresholds of 20% and 30%, respectively. The ESCB also pointed to overnight reverse repurchase agreements (repos) and short-term sovereign bonds as alternative instruments issuers could use to meet liquidity demands.

Beyond the reserve rules, the ESCB highlighted what it called "material challenges" in enforcing MiCA, noting that non-compliant crypto companies can still access EU customers despite the bloc's licensing regime. The central banks' recommendations come as the European Commission reviews the framework it introduced to bring crypto-asset oversight across the union, with stablecoin regulation remaining one of the most contested elements of the policy.