ECB, EU central banks oppose MiCA stablecoin deposit rule

The European Central Bank and other EU central banks said stablecoin issuers should not be required to hold a minimum proportion of reserve assets as bank deposits. They said changes in the stablecoin market could expose lenders to risks and make deposits less stable. The European System of Central Banks, which comprises the ECB and the 27 national central banks of EU countries, made the comments in a response to a consultation on the Markets in Crypto-Assets regulation, known as MiCA. MiCA is a set of EU-wide crypto rules that came into force last year. Major stablecoin issuers currently must hold 60% of their reserves as bank deposits. The central banks recommended instead requiring a minimum percentage of token reserves to be held in assets that mature within one and five working days. They also said European regulators face material challenges in enforcing the bloc’s crypto regulations. Non-compliant crypto companies continue to have access to EU customers, creating investor protection concerns.