Key points

  • The European System of Central Banks says major stablecoin issuers should not be forced to keep 60% of reserves as bank deposits.
  • It proposes a liquidity-based alternative focused on reserve assets maturing within one to five working days.
  • The debate could reshape how MiCA balances stablecoin liquidity, bank exposure and investor protection.

The European Central Bank and the national central banks of the European Union are pushing for a change to one of MiCA’s most important stablecoin reserve requirements. In a response to a regulatory consultation reported by Reuters on September 22, the European System of Central Banks said major stablecoin issuers should not be required to keep 60% of their reserve assets as bank deposits. The group instead wants the rule reframed around the maturity and liquidity of reserve assets.

Why the central banks want a different reserve test

Under the current EU framework, significant stablecoins face a high bank-deposit requirement intended to keep reserves readily available and reduce liquidity risk. The central banks argue that forcing issuers to hold such a large share of reserves as deposits can create a different problem: it can tie stablecoin issuers more closely to commercial banks and make bank funding less stable if issuers move large deposits quickly during periods of stress.

Related reporting: U.S. banking groups seek tighter stablecoin reward limits in CLARITY Act

The ESCB’s proposed alternative would require a minimum share of token reserves to be held in assets that mature within one to five working days, according to Reuters. That would shift the focus from where reserves are held to how quickly they can be converted into cash. The proposal does not remove the need for high-quality backing; it changes the mechanism used to judge whether reserves are liquid enough to meet redemptions.

ECB had already warned about two-way contagion

The ECB has previously highlighted the tension in MiCA’s deposit-heavy approach. In a June 2026 speech, ECB Executive Board member Isabel Schnabel noted that MiCA requires at least 30% of stablecoin reserves to be held as bank deposits, rising to 60% for significant stablecoins. She said this can expose stablecoins to bank default risk, while a run on a stablecoin could also trigger sudden withdrawals of deposits from banks. That creates a potential channel of contagion in both directions.

The 2023 stress around USD Coin after the failure of Silicon Valley Bank remains a useful example of why reserve location matters. Part of USDC’s backing was held as bank deposits, and uncertainty over access to those funds temporarily pressured the token’s peg. European policymakers are trying to design rules that preserve immediate redemption capacity without concentrating too much reserve risk inside the banking system.

Enforcement is also part of the MiCA debate

The central banks also warned that European regulators face material challenges enforcing the bloc’s crypto rules when non-compliant providers can still reach EU customers. That means the reserve debate is not only about technical asset allocation. It also raises the question of whether stricter rules for licensed issuers can work effectively if offshore or non-compliant firms continue serving the same market with fewer restrictions.

Any change would require further regulatory and legislative work, so the current MiCA requirements remain in force unless the framework is formally amended. For stablecoin issuers, banks and exchanges operating in Europe, the key issue is whether policymakers ultimately prefer a fixed bank-deposit percentage or a broader liquidity standard based on short-maturity assets. The outcome could influence reserve portfolios, banking relationships and the cost of issuing regulated stablecoins across the EU.

Sources

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