Crypto · updated 1h ago · 2 min read
European Central Bank Proposes Replacing MiCA Stablecoin Bank-Deposit Rules With Liquidity Standards
ECB and EU central banks propose dropping stablecoin reserve deposits, replacing them with liquidity thresholds. Rule change aims to curb liquidity risk for banks from large stablecoin redemptions.
Coverage differs on how strongly the enforcement problem is foregrounded.
6 of 8 outlets skipped it: central banks want the stablecoin remuneration ban extended to lending/borrowing/staking..
15outlets compared
Same story, two versions
tap a side to read it in full
CoinDesk
“European central banks push to expand stablecoin yield ban to crypto lending and staking”Read the original ↗
Cointelegraph
“The ECB and EU central banks want to replace mandatory bank-deposit thresholds for stablecoin reserves”Read the original ↗
Different lead angles may steer readers towards yield controls versus bank-liquidity mechanics.
MiCA reserve rules shift
The European Central Bank and the central banks of the European Union’s 27 member states proposed replacing MiCA’s bank-deposit requirement for stablecoin reserves with liquidity-based standards, and the European System of Central Banks submitted its opinion to the European Commission’s MiCA review on September 22. The ESCB said that under existing MiCA rules, stablecoins issued by electronic money institutions must hold at least 30% of reserves as deposits with credit institutions, with the ratio rising to 60% for stablecoins classified as "significant." The ESCB recommended abolishing those reserve deposit requirements and instead setting minimum ratios of reserve assets convertible to cash within one and five business days, citing overnight repurchase agreements (repos) and short-term government bonds as eligible liquidity instruments.
The ECB analysis argued that funds deposited by electronic money institutions face a 100% outflow rate in bank liquidity calculations, contrasting with the roughly 5% expected outflow rate applied to ordinary retail deposits. The proposal also framed the change as a way to reduce liquidity strain during large-scale stablecoin redemptions, while keeping broader MiCA obligations related to backing, safeguarding, and redemption in place.
Liquidity buckets and thresholds
The European Banking Authority standards cited by the ESCB set liquidity thresholds for reserve assets convertible to cash within one and five business days, with significant stablecoins needing at least 40% within one business day and 60% within five business days. The ESCB’s liquidity approach also applied to standard stablecoins, which the proposal described as requiring 20% within one business day and 30% within five business days. The ESCB warned that large-scale stablecoin redemptions could prompt issuers to rapidly withdraw bank deposits, increasing liquidity strain on banks during market stress.
The ESCB said the current deposit rule "creates a direct link between issuers and credit institutions" and could expose banks to liquidity problems if a stablecoin run forces an issuer to rapidly withdraw deposits. The ESCB’s response also argued that the liquidity standards hinge on maturity rather than marketability, because assets maturing tomorrow can be converted to cash without needing to find a buyer or accept current market prices.
Yield ban and enforcement
Beyond reserve composition, the ESCB backed expanding MiCA’s stablecoin remuneration ban to cover lending, borrowing, staking, and other products that generate indirect returns for token holders. The ESCB said it "continues to support the prohibition on CASPs paying remuneration on stablecoins" and argued the ban should not be limited to services already governed by MiCA. The ESCB warned that stablecoins can be "transformed into yield-bearing arrangements through lending, staking or other layered structures," potentially circumventing the prohibition on direct remuneration.
The ESCB also raised "material challenges" in enforcing MiCA, saying non-compliant crypto companies can still access EU customers despite the bloc’s licensing regime. The ESCB’s position tied the regulatory stakes to bank funding stability, because it argued that if reserves are held as bank deposits, stablecoins can alter banks’ funding structures by replacing relatively stable retail deposits with deposits from stablecoin issuers.