The European Central Bank and the EU’s 27 national central banks have asked regulators to replace MiCA’s 30% and 60% bank-deposit floors for stablecoin reserves with maturity-based liquidity requirements.
Summary
- MiCA requires regular stablecoin issuers to hold 30% of reserves in commercial bank deposits.
- The bank-deposit requirement rises to 60% for stablecoins classified as significant.
- European central banks said large redemptions could transmit stress from stablecoins to commercial lenders.
- Tether CEO Paolo Ardoino warned about the same reserve structure in 2024.
The European System of Central Banks said in its response to the European Commission’s MiCA consultation that stablecoin issuers should not have to place a fixed share of their reserves in bank deposits.
Instead, the ESCB recommended setting minimum proportions for reserve assets that mature within one working day and five working days. Such a model would focus on how quickly an issuer can access its reserves during redemptions rather than how much money it keeps at commercial banks.
MiCA currently requires issuers to hold at least 30% of their reserves as bank deposits. For issuers whose tokens receive the “significant” classification, the requirement rises to 60%.
“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 in their response, according to Reuters.
MiCA deposit rule could transmit redemption stress
Under the existing model, a stablecoin issuer may receive money from customers and place the required portion with one or more commercial banks. A rush to redeem tokens could then force the issuer to withdraw a large amount of those deposits within a short period.
The ESCB said such withdrawals could expose commercial lenders to a stablecoin run because deposits from token issuers behave differently from ordinary household deposits. Issuer deposits may leave quickly when crypto markets face stress or token holders seek redemptions.
While drafting MiCA, EU policymakers treated bank deposits as a source of readily available liquidity. An ECB study published in April said a significant stablecoin issuer could meet redemptions equal to as much as 60% of its supply by drawing down deposits without immediately selling sovereign bonds.
The same study also identified a second risk: withdrawals during a stablecoin run could pass financial stress into the banking system. Deposits may protect bond markets from forced sales at first, according to the ECB, while placing the commercial banks holding the money under pressure.
MiCA’s reserve design has already affected which stablecoins European exchanges can support. As crypto.news reported in July, USDT lost access to regulated EU exchange order books after Tether declined to seek authorization under the framework.
Coinbase Europe removed USDT in December 2024, followed by Crypto.com in January 2025. Binance restricted European USDT trading pairs in March 2025, while Kraken moved the token to a sell-only model before ending support.
Tether flagged MiCA reserve risk in 2024
More than two years before the ESCB response, Tether CEO Paolo Ardoino argued that MiCA’s deposit floor could expose stablecoin holders to failures at commercial banks.
In an August 2024 interview with Wired, Ardoino used a hypothetical €10 billion stablecoin to explain his concern. Under the 60% requirement, an issuer would need to place €6 billion with banks, which could then use much of the money for lending.
“Imagine a customer asks to redeem €2 billion [worth of stablecoin], but the bank has only €600 million,” Ardoino said. “Then you are in a situation in which both the bank and stablecoin go bankrupt.”
Ardoino said he did not consider the structure safe and argued that it could create “additional systemic risks in Europe” instead of reducing them. His comments focused on the possibility that an issuer could lose access to uninsured deposits precisely when token holders request large redemptions.
Several months earlier, in April 2024, Ardoino had pointed to the collapse of Silicon Valley Bank as evidence of the risk attached to uninsured deposits. Circle’s USDC temporarily lost its dollar peg in March 2023 after the company disclosed 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.”
Calling for issuers to be allowed to keep all reserves in Treasury bills, Ardoino argued that securities would return to their legal owner following a bank failure. Tether has kept much of USDT’s backing in U.S. Treasury securities rather than adopting MiCA’s European bank-deposit model.
The company later said it would reconsider a MiCA application only when the framework became safer for issuers and consumers. European restrictions have continued in the meantime, with OKX Europe opening a one-way conversion route in July for customers moving from USDT into MiCA-authorized USDC.
MiCA review gives regulators a route to amend reserves
The ESCB submitted its recommendation through the European Commission’s review of MiCA, which began with a public consultation on May 20 and accepted responses through Aug. 31.
According to the Commission, the review sought input from token issuers, crypto service providers, financial institutions, technology companies, academics, industry groups and public authorities. Officials are examining whether MiCA remains suitable after changes in digital-asset markets and international regulation.
Feedback will inform a report required under Articles 140 and 142 of MiCA. The Commission could attach a legislative proposal if it decides that the regulation needs amendments, as previously covered in a report on the planned MiCA review in 2027.
Stablecoin reserve rules are not the ECB’s only focus. A separate paper published in September called for the current prohibition on issuer-paid stablecoin interest to cover rewards offered through affiliated exchanges, lending products and staking services. The proposal to expand the yield ban addresses returns paid to users, while the latest ESCB recommendation concerns the assets held against tokens.
U.S. rules allow deposits and Treasury securities
For U.S. token holders, the dispute provides a direct comparison with the reserve system created by the GENIUS Act, which President Donald Trump signed into law in July 2025.
The U.S. framework requires permitted payment stablecoin issuers to maintain reserves of at least one dollar for every dollar of tokens in circulation. Eligible assets include U.S. dollars, funds held at certain regulated or insured depository institutions, short-term Treasury securities, Treasury-backed reverse repurchase agreements and qualifying money market funds.
Unlike MiCA, the U.S. law does not require issuers to keep a fixed 30% or 60% of reserves in commercial bank deposits. The White House described the permitted backing as liquid assets such as dollars and short-term Treasuries, while the law also requires issuers to publish monthly reserve-composition disclosures.
The Office of the Comptroller of the Currency proposed implementation rules in February 2026. Its proposal would require issuers under OCC oversight to show that they can convert each type of reserve asset 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 position that interchangeable multi-issuance models are not permitted under current MiCA rules and said any future authorization should require safeguards, including an assessment of whether the other country’s regulatory system is equivalent to the EU framework.