The European Central Bank (ECB) and the 27 national central banks of the European Union have called for MiCA’s fixed requirements on stablecoin reserves held in commercial bank deposits to be replaced with rules based on how quickly those assets can be accessed.
MiCA currently requires regular stablecoin issuers to hold at least 30% of their reserves in bank deposits. The threshold rises to 60% for tokens classified as “significant”.
In its response to the European Commission’s MiCA consultation, the European System of Central Banks (ESCB) said issuers should not be required to keep a set proportion of reserves with commercial banks. Instead, it recommended minimum levels of assets maturing within one working day and five working days.
The proposed approach would measure an issuer’s ability to meet redemptions quickly, rather than requiring a specific amount to be deposited with banks.
“If reserves are held as bank deposits, stablecoins can alter banks’ funding structures by replacing relatively stable retail deposits with deposits from stablecoin issuers, which tend to be less stable and more sensitive to market conditions,” the central banks said, according to Reuters.
The ESCB warned that a rush by customers to redeem tokens could force issuers to withdraw large sums rapidly, placing commercial lenders under pressure. Unlike household deposits, funds held by stablecoin issuers may leave quickly during periods of stress in cryptocurrency markets.
MiCA’s bank-deposit model was intended to provide readily available liquidity. An ECB study published in April found that a significant stablecoin issuer could meet redemptions worth up to 60% of its supply by drawing on deposits without immediately selling sovereign bonds. However, the study also said such withdrawals could transfer stress to the banks holding those funds.
The reserve rules have already influenced which stablecoins European exchanges support. Tether declined to seek authorisation under MiCA, and USDT subsequently lost access to regulated EU exchange order books. Coinbase Europe removed the token in December 2024, Crypto.com followed in January 2025, and Binance restricted European USDT trading pairs in March 2025. Kraken first made USDT sell-only before ending support.
Tether previously raised concerns
Tether CEO Paolo Ardoino warned about the risks of the deposit requirement in an interview with Wired in August 2024. Using a hypothetical €10 billion stablecoin, he said the 60% rule would require €6 billion to be placed with banks, which could use much of that money for lending.
Ardoino said he did not regard the arrangement as safe and argued that it could create “additional systemic risks in Europe”. He was concerned that issuers might lose access to uninsured deposits when customers were seeking large-scale redemptions.
In April 2024, he cited the collapse of Silicon Valley Bank. Circle’s USDC temporarily lost its dollar peg in March 2023 after the company revealed that $3.3 billion of its reserves were held at the failed bank.
“Uninsured cash deposits are not a good idea,” Ardoino wrote. “If a bank goes bankrupt, uninsured cash goes into bankruptcy.”
He advocated allowing issuers to hold all reserves in Treasury bills, saying those securities would return to their legal owner if a bank failed. Tether has kept much of USDT’s backing in U.S. Treasury securities rather than adopting MiCA’s bank-deposit model.
The company later said it would reconsider applying under MiCA only if the framework became safer for issuers and consumers. In July, OKX Europe opened a one-way conversion route for customers moving from USDT to MiCA-authorized USDC.
Review could lead to rule changes
The ESCB made its recommendation as part of the European Commission’s MiCA review. The public consultation began on May 20 and accepted responses until Aug. 31.
The Commission sought views from token issuers, crypto service providers, financial institutions, technology companies, academics, industry organisations and public authorities. It is assessing whether MiCA remains suitable following developments in digital-asset markets and regulation worldwide.
The responses will contribute to a report required under Articles 140 and 142 of MiCA. If amendments are considered necessary, the Commission could submit a legislative proposal, as previously covered in a report on the planned MiCA review in 2027.
The ECB has also proposed extending MiCA’s ban on issuer-paid stablecoin interest to rewards provided through affiliated exchanges, lending products and staking services. That September proposal concerns returns paid to users, whereas the latest ESCB recommendation relates to the assets backing tokens.
U.S. framework takes a different approach
The U.S. GENIUS Act, signed into law by President Donald Trump in July 2025, requires permitted payment stablecoin issuers to hold at least one dollar of eligible reserves for every dollar of tokens in circulation.
Permitted assets include U.S. dollars, funds held with certain regulated or insured depository institutions, short-term Treasury securities, Treasury-backed reverse repurchase agreements and qualifying money market funds. Unlike MiCA, the law does not impose a fixed 30% or 60% bank-deposit requirement and requires monthly disclosures of reserve composition.
The Office of the Comptroller of the Currency proposed implementation rules in February 2026. Issuers overseen by the OCC would have to demonstrate that each reserve asset could be converted into cash, including through Treasury sales or repurchase agreements.
The ESCB also addressed stablecoins issued through connected entities inside and outside the EU. It supported the European Systemic Risk Board’s view that interchangeable multi-issuance models are not allowed under current MiCA rules, and said future authorisation should include safeguards such as assessing whether the other country’s regulatory system is equivalent to that of the EU.
