180 degree turn in Frankfurt. The European Central Bank and the national central banks of the euro zone are calling for the removal of the obligation to house 60% of the reserves of major stablecoins in bank deposits. Reuters reports that the Eurosystem wants to relax the rules to also allow the holding of liquid assets, which can be mobilized within one day then five working days.
The argument will confuse those who saw in MiCA a text tailor-made for the banking sector: according to central bankers, deposits backed by stablecoin flows constitute unstable financing, likely to evaporate at the first massive redemption movement.
Key Points
The ECB proposes to replace the MiCA obligation to place 60% of stablecoin reserves in bank deposits
The replacement would aim for minimum thresholds of assets that can be mobilized within one and five working days, based on the model of monetary funds.
Central bankers judge deposits linked to stablecoin flows too unstable to finance banks
The review of MiCA remains in the hands of the Commission, Parliament and Council, where the ECB only has an advisory opinion
MiCA: the ECB wants to swap bank deposits for a liquidity ladder
Since the entry into application of the stablecoins component of MiCA, any issuer of electronic money tokens must guarantee each token with an equivalent reserve and place at least 30% in deposits with credit institutions. This figure jumps to 60% as soon as the token switches to the “major” category, a classification pronounced by the European Banking Authority beyond 10 million holders, 5 billion euros in circulation or 2.5 million daily transactions.
However, this 60% ceiling no longer seems appropriate. Therefore, the Eurosystem proposes to replace this floor with a maturity scale. In this case, a minimum fraction of the reserves should be available in one working day, another in five working days. The mechanism comes straight out of the regulation of monetary funds, which for years have been subject to daily and weekly liquid asset quotas.
The reasoning of the central banks is valid. An issuer faced with a wave of reimbursements empties its accounts in one fell swoop, and the establishment that hosted them loses its funding overnight. A risk we have already faced. Indeed, Circle held $3.3 billion at Silicon Valley Bank when the Californian bank collapsed, and USDC had then fallen to $0.87 before the intervention of the American authorities. The European deposit guarantee caps at 100,000 euros per depositor and per bank, beyond which an issuer's reserves do not benefit from any safety net.
Stablecoins in euros: Frankfurt advances its pawns on the revision of MiCA
The 60% floor mechanically directs issuers' reserves to bank balance sheets. Removing it would send them back to short-term sovereign debt, a model already addressed across the Atlantic by the GENIUS Act, which requires American issuers to have reserves in cash and Treasury bills of less than 93 days. Tether is now among the twenty largest holders of American public debt, ahead of several sovereign states.
The market for stablecoins denominated in euros still represents less than 1% of global capitalization. Circle's EURC, Société Générale-FORGE's EURCV and AllUnity's EURAU share these crumbs, while nine European banks including ING, UniCredit, CaixaBank and Danske Bank are setting up their own issuer in the Netherlands. Relieving the deposit constraint would make these tokens more profitable to operate, with short securities bringing in more than a bank account.
Frankfurt does not hide its preferences. The ECB is piloting its digital euro in parallel, with a testing phase scheduled for 2027 and a first issue planned for 2029, and is battling against multi-issue schemes which allow the same stablecoin to exist on both sides of the Atlantic in interchangeable tokens. The Commission has also proposed entrusting ESMA, the European markets regulator, with the supervision of the main crypto providers on the continent.
However, the decision escapes the Eurosystem. The revision of MiCA will be played out between the Commission, Parliament and the Council, where the ECB only has an advisory opinion. The banks of the Dutch consortium are not waiting for arbitration and are aiming to put their stablecoin into circulation in euros this year.
