The European Central Bank and national central banks across the European Union have pushed back against a proposal in consultations on the Markets in Crypto-Assets regulation, or MiCA, that would require major stablecoin issuers to keep at least 60% of their reserve assets in bank deposits. According to Reuters, the central bank system argued that such a rule could expose banks to volatility tied to the stablecoin market and weaken deposit stability. Instead, the authorities proposed a different reserve structure, saying a set share of reserve assets should consist of short-term instruments maturing within one and five working days. The ECB and EU central banks also warned that enforcement remains difficult even after MiCA has taken effect. In their view, non-compliant crypto firms can still reach customers in the European Union, creating what they described as a “major challenge” for supervision and raising risks for investor protection.
According to Reuters, the European Central Bank and central banks across the European Union said in consultations on the Markets in Crypto-Assets regulation, or MiCA, that they oppose a requirement for major stablecoin issuers to hold at least 60% of reserve assets as bank deposits.
The central bank system said such a rule could expose banks to volatility in the stablecoin market and weaken deposit stability.
As an alternative, the authorities proposed requiring a certain share of reserve assets to be short-term assets maturing within one and five working days.
The central banks also said that, although MiCA has already taken effect, non-compliant crypto firms can still reach EU customers. They described enforcement as a "major challenge" and said it creates risks for investor protection.
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