The European System of Central Banks proposed changing MiCA's liquidity rules for stablecoin issuers. It recommended removing fixed minimum shares of reserves held as bank deposits and replacing them with minimum holdings of highly liquid assets. Those assets would generally mature within one to five working days. The proposal has not been adopted and forms part of the European Union's review of its crypto-asset framework.
MiCA currently requires issuers to hold between 30% and 60% of reserve assets in bank deposits, depending on whether a token is classified as significant. The framework was designed to ensure issuers can meet heavy redemption requests. The central-bank system argued that liquidity could also be maintained through instruments such as very short-dated Treasury bills and reverse-repurchase transactions.
DEPOSIT RISKS DRIVE REVIEW
The central banks said deposits from stablecoin issuers should not be treated as stable bank funding. Such balances may be concentrated among a small number of issuers and can leave quickly during market stress. A sudden withdrawal could therefore transmit pressure from a stablecoin run to the banks holding its reserves.
The proposal also considered the economics of euro-denominated stablecoins. Bank deposits may generate less income than other eligible liquid instruments, reducing issuers' ability to sustain their businesses. The system said a broader pool of liquid assets could support issuer viability without weakening redemption capacity, provided maturity and prudential standards remain strict.
WIDER MICA CHANGES CONSIDERED
The central banks also sought stronger audit requirements, clearer limits for foreign-currency stablecoins and higher capital expectations for significant issuers. They reiterated opposition to paying interest on stablecoins and called for clearer treatment of crypto lending, staking and tokenised financial instruments. These recommendations extend beyond the reserve-composition question.
The next milestone is the European Commission's response after its consultation closes. Any change to MiCA would require the normal EU legislative process, so the current deposit thresholds remain applicable unless and until amended. The final design will determine how regulators balance issuer liquidity, bank funding stability and competition in euro stablecoins.