European central banks seek removal of MiCA stablecoin reserve rule

The European System of Central Banks, which includes the European Central Bank and the national central banks of all 27 EU member states, filed comments on Tuesday asking the European Commission to remove a MiCA rule on stablecoin reserves. The rule requires ordinary issuers to keep 30% of their funds in bank deposits and issuers designated as significant to keep 60%. The central banks instead want a minimum share of reserves held in assets maturing within one to five working days. Reserves are the cash and bonds an issuer holds to back each token sold. The filing said money that moves with token creation and redemption is not stable deposit money and that heavy redemptions could drain funds from lenders overnight. It also said regulators face material challenges enforcing the rules because non-compliant crypto firms still reach EU customers. The ECB has separately warned that growth in euro stablecoins could reduce bank lending. A stablecoin is a token designed to maintain a fixed value, usually one dollar or one euro. Tether, which issues USDT, the largest stablecoin, did not seek the EU license over the same deposit requirement. Chief executive Paolo Ardoino has argued since 2024 that the requirement makes tokens less safe because EU deposit insurance covers deposits only up to 100,000 euros. Ardoino said Tether might reconsider if MiCA becomes safer for consumers and stablecoin issuers. Revolut dropped USDT for Europe this year. BeInCrypto reported in July that Circle supported a MiCA rule change that could allow Tether to return. The consultation closes on September 30. The 30% and 60% deposit requirements remain law until EU lawmakers amend MiCA, and Tether still has no EU authorization.