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The European Central Bank (ECB) is making a bold move. The institution wants to completely eliminate the requirement for stablecoin issuers to place a portion of their reserves in commercial banks — a rule that has been in place since the implementation of MiCA. The proposal was made on Tuesday, and it significantly changes the landscape for the European crypto ecosystem.
Here’s the current situation: MiCA, the European regulation on crypto assets established in 2025, currently requires stablecoin issuers to keep 30% of their reserves in the form of bank deposits. For large issuers — those exceeding certain volume or usage thresholds — this figure rises to 60%. It’s substantial. And that’s precisely what the ECB, along with the European System of Central Banks (ESCB), wants to abolish. Instead, they propose setting a percentage of readily available assets, assets that can be liquidated within one to five business days. Not locked bank deposits, but liquid, short-term assets that can be mobilized quickly.
No deposits. More flexibility.
The logic behind this is paradoxically to protect the banks. Authorities fear that in the event of a panic over a major stablecoin — like a massive rush of users wanting to convert their tokens into euros or dollars within hours — the banks holding these reserves would themselves come under pressure. The idea is that a bank deposit is not necessarily safer than a short-term liquid asset if panic ensues. On the contrary, it could create a direct contagion between the crypto market and the traditional banking system. And that’s something regulators clearly want to avoid.
MiCA Under Pressure Since Its Launch
MiCA has been in effect since 2025, but discussions about its blind spots have never really ceased. Stablecoins, pegged to fiat currencies like the euro or the dollar, are increasingly used for fast and low-cost payments. Their popularity is rising, and with it, questions about their potential impact on financial stability. European supervisory authorities have been closely monitoring this for some time.
The problem identified by the ECB is quite specific: the current requirement creates a structural dependency between stablecoin issuers and commercial banks. In normal times, that’s manageable. But if a crisis of confidence erupts — concerning an issuer, a token, or more broadly the crypto market — the banks holding these reserves become a transmission belt for the shock. The mandatory 30% or 60% deposits, intended to secure the system, could actually amplify tensions rather than cushion them.
Hence the proposal to switch to short-term liquid assets. Assets that can be sold quickly, without going through a bank, without creating additional pressure on bank balance sheets. The ECB and the ESCB believe this offers more robust resilience against potential shocks.
What This Means for Issuers
For stablecoin issuers operating in Europe, it’s a significant change if it goes through. Managing 60% of their reserves in bank deposits is restrictive. It limits investment options, creates exposure to partner banks, and complicates liquidity management in times of crisis. Switching to short-term liquid assets — Treasury bills, money market instruments, that sort of thing — is probably closer to what major money market funds already do. More flexible. Perhaps safer, according to the ECB.
But for now, this remains a recommendation. Approval from the competent authorities is necessary. Discussions around this adjustment to MiCA continue, and nothing is set in stone yet.
What is clear is that the EU’s central banks are pushing in the same direction. The ESCB supports the modification. This gives weight to the proposal, but the European regulatory process takes time — no specific date for a final decision, the source does not specify.
Europe has been seeking a balance for some time between allowing innovation in the cryptocurrency sector and protecting the financial system from disruptions that could come from this sector. Stablecoins, because they sit precisely at the border between the two worlds — crypto on one side, fiat currencies on the other — concentrate a good deal of these regulatory tensions. The ECB’s proposal fits into this context: less direct connection with commercial banks, more autonomous liquidity, and theoretically less risk of contagion if things go awry.
The issuers concerned manage reserves that can reach billions of euros for the largest market players.
Frequently Asked Questions
What exactly is the ECB proposing for stablecoin reserves?
The ECB wants to remove the requirement to keep 30% (or 60% for large issuers) of reserves in bank deposits, replacing it with a percentage of assets liquidable within one to five business days.
Why does the ECB want to reduce mandatory bank deposits for stablecoins?
Mandatory bank deposits could amplify a crisis: if users massively rush to a stablecoin, the banks holding these reserves would face direct pressure, creating a risk of contagion between the crypto market and the traditional banking system.
Which European regulation currently governs stablecoins?
It’s MiCA, the European regulation on crypto assets, implemented in 2025, that currently sets the reserve rules for stablecoin issuers operating in Europe.
Why It Matters
The ECB's proposal to remove mandatory bank deposits for stablecoin issuers marks a significant shift in regulatory approach, potentially enhancing liquidity and operational flexibility for these entities. This change could bolster the competitive landscape for stablecoins in Europe, encouraging innovation and attracting investment by reducing operational burdens. Moreover, it reflects a broader trend of regulators adapting to the evolving digital asset space while striving to balance consumer protection and market growth.
