Crypto: ECB Seeks to Scrap MiCA's 60% Stablecoin Rule

A 180-degree turn in Frankfurt. The European Central Bank and the national central banks of the Eurozone are calling for the removal of the requirement to hold 60% of major stablecoin reserves in bank deposits. Reuters reports that the Eurosystem wants to relax the rules to also allow for the holding of liquid assets that can be mobilized within one to five business days.

The argument will surprise those who saw MiCA as a regulation tailored for the banking sector: according to central bankers, deposits backed by stablecoin flows constitute unstable funding, prone to evaporating at the first sign of a massive redemption run.

Key Takeaways

• The ECB proposes replacing the MiCA requirement to place 60% of stablecoin reserves in bank deposits
• The replacement would target minimum thresholds for assets accessible within one and five business days, modeled on money market funds
• Central bankers consider deposits linked to stablecoin flows too volatile to finance banks
• MiCA revision remains in the hands of the Commission, the Parliament, and the Council, where the ECB only holds an advisory role

MiCA: The ECB wants to swap bank deposits for a liquidity scale

Since the stablecoin section of MiCA came into effect, every e-money token issuer must back each token with an equivalent reserve and place at least 30% in deposits with credit institutions. This figure jumps to 60% as soon as the token is classified as "significant," a designation determined by the European Banking Authority once it exceeds 10 million holders, 5 billion euros in circulation, or 2.5 million daily transactions.

However, this 60% ceiling no longer seems appropriate. Consequently, the Eurosystem proposes replacing this floor with a maturity ladder. In this scenario, a minimum fraction of reserves would need to be accessible within one business day, and another within five business days. The mechanism is lifted directly from money market fund regulations, which have been subject to daily and weekly liquid asset quotas for years.

The central bankers' reasoning is sound. An issuer facing a wave of redemptions empties its accounts all at once, and the institution hosting them loses its funding overnight. A risk we have already witnessed. Indeed, Circle held 3.3 billion dollars at Silicon Valley Bank during the Californian bank's collapse, and the price of USDC fell to 0.87 dollars before U.S. authorities intervened. The European deposit guarantee is capped at 100,000 euros per depositor per bank, beyond which an issuer's reserves have no safety net.

Euro-denominated stablecoins: Frankfurt makes its move on the MiCA revision

The 60% floor automatically directs issuer reserves toward bank balance sheets. Removing it would shift them toward short-term sovereign debt, a model already adopted across the Atlantic by the GENIUS Act, which mandates that U.S. issuers hold reserves in cash and Treasury bills with maturities of less than 93 days. Tether now ranks among the twenty largest holders of U.S. government debt, ahead of several sovereign states.

The market for euro-denominated stablecoins still accounts for less than 1% of global market capitalization. Circle’s EURC, Société Générale-FORGE’s EURCV, and AllUnity’s EURAU are fighting over these scraps, while nine European banks—including ING, UniCredit, CaixaBank, and Danske Bank—are setting up their own issuer in the Netherlands. Easing the deposit constraint would make these tokens more profitable to operate, as short-term securities yield more than a bank account.

Frankfurt is not hiding its preferences. The ECB is simultaneously piloting its digital euro, with a test phase scheduled for 2027 and a first issuance envisioned for 2029. It is also pushing back against multi-issuance schemes that allow the same stablecoin to exist on both sides of the Atlantic as interchangeable tokens. Furthermore, the Commission has proposed entrusting the supervision of the continent's major crypto providers to ESMA, the European markets regulator.

However, the final decision lies outside the Eurosystem's control. The MiCA revision will be determined by the Commission, the Parliament, and the Council, where the ECB only holds an advisory role. As for the banks in the Dutch consortium, they are not waiting for the final verdict and are aiming to launch their euro stablecoin as early as this year.

The news that matters, summarized in 2 minutes. Monday to Friday, in your inbox.