Finance
Europe's Central Banks Want the Stablecoin Deposit Rule Scrapped, and the Industry's Oldest Argument Just Won
The European System of Central Banks just handed the stablecoin industry its biggest policy win in years. In a response to the European Commission's review of MiCA published September 22, the ESCB, the ECB plus the 27 national central banks, called for scrapping the rule that forces stablecoin issuers to hold 30 percent of reserves as bank deposits, or 60 percent for major issuers.
The replacement the central banks propose is a liquidity test instead of a deposit quota. Significant stablecoins would hold at least 40 percent of reserves in assets maturing within one working day and 60 percent within five working days, with 20 and 30 percent thresholds for smaller tokens, following draft rules the European Banking Authority published in 2024. The paper also points to overnight reverse repurchase agreements and short term sovereign bonds as instruments issuers could use to meet the bar.
The reasoning flips the usual script. Big stablecoin deposits, the central banks argue, can reshape how banks fund themselves, replacing steady retail deposits with issuer deposits that move with market conditions. If a wave of redemptions ever forced an issuer to pull deposits quickly, the banks holding them could feel the strain. A rule written to make stablecoins safer, in other words, could transmit stablecoin turbulence straight into the banking system it was meant to protect.
Here is the part that should make the industry smile. Tether CEO Paolo Ardoino has been making exactly this argument since at least 2024, arguing that the deposit quotas create strains for banks and issuers alike. The central banks have now adopted the industry's own critique as official policy advice. When the referee starts quoting the players' playbook, the game is changing.
The paper goes further. It flags what it calls material challenges in enforcing MiCA, noting that non compliant crypto companies can still reach EU customers despite the bloc's licensing regime, raising investor protection questions. It also doubles down on the view that multi issuance models, where global firms treat EU issued tokens as interchangeable with tokens issued elsewhere, sit outside what the current rules allow. The message is consistent. Brussels built an ambitious rulebook, and now the hard part, making it work across borders, is showing.
What it means for readers is a more workable future for euro stablecoins. Liquidity buckets are easier to manage than forced bank deposits, and a regime the central banks themselves endorse is a regime issuers can build on with confidence. The MiCA review consultation runs to September 30, so the window for this rewrite is open right now. Stable, well designed digital dollars and euros in Europe just got a meaningful step closer.
Quick answers
What is this story about?
The European System of Central Banks just handed the stablecoin industry its biggest policy win in years. In a response to the European Commission's review of MiCA published September 22, the ESCB, the ECB plus the 27 national central banks, called for scrapping the rule that forces stablecoin issuers to hold 30 percent of reserves as bank deposits, or 60 percent for major issuers.
Why does this story matter?
What it means for readers is a more workable future for euro stablecoins. Liquidity buckets are easier to manage than forced bank deposits, and a regime the central banks themselves endorse is a regime issuers can build on with confidence. The MiCA review consultation runs to September 30, so the window for this rewrite is open right now. Stable, well designed digital dollars and euros in Europe just got a meaningful step closer.
Sources
- Reuters: ECB, EU central banks oppose stablecoin bank deposit rule
- Cointelegraph: ECB, EU banks seek MiCA changes on stablecoin liquidity rules
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