ECB, EU Banks Seek to Replace MiCA Stablecoin Deposit Rule

The European Central Bank and national central banks in the European System of Central Banks (ESCB) recommended removing MiCA’s mandatory minimum bank-deposit thresholds for stablecoin reserves and replacing them with short-term liquidity requirements.

The recommendation appears in the ESCB’s response, published Tuesday, to the European Commission’s review of the Markets in Crypto-Assets Regulation. Under current MiCA rules, at least 30% of reserves must be held as bank deposits, and significant stablecoins must hold 60% as deposits.

The ESCB said the existing allocation “creates a direct link between issuers and credit institutions” and warned large deposits could expose banks to rapid outflows if an issuer withdrew deposits quickly during a run on a stablecoin. The central banks argued that fixed deposit thresholds could increase liquidity pressure on commercial banks.

Instead of fixed deposit percentages, the ESCB backed rules that set minimum liquidity thresholds based on how quickly reserve assets can be converted to cash. The proposal focuses on assets maturing within one working day and within five working days, rather than on the share of reserves kept in bank accounts.

The ESCB referenced draft standards from the European Banking Authority published in 2024. Those drafts would require significant stablecoins to hold at least 40% of reserves in assets maturing within one working day and 60% within five working days. Non-significant tokens would be subject to thresholds of 20% and 30%, respectively.

The ESCB named short-term instruments such as overnight reverse repurchase agreements and short-term sovereign bonds as examples of reserve assets that meet the proposed liquidity requirements. The central banks said such instruments can be converted to cash quickly without relying on commercial bank deposits.

The response also raised enforcement concerns, noting that MiCA’s licensing regime does not fully prevent non-compliant firms from offering services to EU customers. The ESCB described those enforcement gaps as “material challenges” and called for stronger supervision and improved cross-border enforcement to ensure compliance.

MiCA created a harmonized regulatory framework for crypto-assets across the EU, including rules for asset-referenced tokens and e-money tokens commonly known as stablecoins. The ESCB’s recommendations target how reserve composition is regulated within that framework by prioritizing rapid convertibility of reserve assets over fixed allocations to bank deposits.