ECB, EU Banks Seek MiCA Changes On EU Stablecoin Liquidity Rules
The ESCB said reserve rules should favor liquid assets over bank deposits, warning that stablecoin runs could pressure lenders and expose enforcement gaps.
- On Tuesday, The ESCB proposed replacing mandatory bank-deposit thresholds for Stablecoin reserves with new liquidity requirements, arguing current rules expose lenders to unnecessary risks.
- Current mandates require Stablecoin issuers to hold 30% to 60% of reserves as bank deposits, which The ESCB warns "creates a direct link between issuers and credit institutions."
- Instead of bank deposits, The European System recommends minimum liquidity thresholds for assets maturing within one and five working days, including short-term sovereign bonds and overnight repos.
- Draft rules from the European Banking Authority suggest significant Stablecoins hold at least 40% of reserves in assets maturing within one working day and 60% within five days.
- The ESCB warned of "material challenges" in enforcing MiCA, as non-compliant crypto companies maintain access to European customers, creating investor protection concerns throughout the EU-wide market.
27 Articles
27 Articles
ECB seeks MiCA reserve change flagged by Tether in 2024
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. The European System of Central Banks said in its response to…
Stable coin issuers should not be required to maintain a minimum proportion of their reserve assets as bank deposits, because this could leave creditors exposed to a stable coin race and less stable deposits, said the European Central Bank (ECB) and other central banks of the European Union on Tuesday (22). The European System of Central Banks (ESCB), a body composed of the ECB and the 27 national central banks of the EU countries, made comments…
Key points of the news: The ECB and the EU central banks propose to replace the deposit thresholds for stablecoins in MiCA with staggered liquidity requirements. The European System of Central Banks warns that large reserve deposits in commercial banks could generate systemic risks in the face of a massive rush of redemptions. ... Read more
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