ECB Proposes Changes to MiCA Stablecoin Reserve Requirements
- The ECB and EU national central banks aim to eliminate MiCA’s requirement for stablecoin issuers to hold 30% of reserves in bank deposits, increasing to 60% for significant issuers.
- Regulators warn that mass token redemptions could lead to rapid deposit outflows, placing additional strain on banks.
- The proposed focus would shift from bank deposits to asset liquidity, emphasizing minimum reserve shares through assets maturing within one and five business days.
- The ESCB highlighted risks associated with stablecoin issuer deposits being less stable than traditional retail deposits.
- Despite a June deadline for compliance, some crypto companies are still operating in the EU without a MiCA license, raising investor protection concerns.
The ECB’s proposal reflects concerns about the potential instability of stablecoin reserves held as bank deposits and aims to mitigate risks in the banking sector during market fluctuations.
As of now, MiCA’s requirements remain unchanged at 30% and 60%, pending further consultation and legislative changes.
