The European Central Bank (ECB) and the national central banks of all 27 EU member states are calling on regulators to rewrite the rules governing stablecoin reserves, warning that the current framework could put banks at risk.

The European System of Central Banks (ESCB) published its formal response on Tuesday to the European Commission's review of the Markets in Crypto-Assets Regulation (MiCA), the rulebook that came into force last year and sets requirements for crypto companies operating across the EU. The regulation established the bloc's first harmonized regime for crypto-assets, including the reserve and redemption standards that apply to stablecoin issuers. Stablecoins are crypto assets designed to hold a steady value against a reference currency, and their promise to holders rests on reserves that can actually be reached when redemptions come in. At the center of the ESCB's proposal is a call to scrap MiCA's requirement that major stablecoin issuers hold a set share of reserves as bank deposits, replacing it with liquidity thresholds tied to how quickly reserve assets can mature.

Because the ESCB groups the ECB with the national central banks of every member state, the document represents a coordinated position from the EU's central banking community as a whole rather than the view of a single institution — the kind of unified feedback the Commission's review will have to weigh alongside responses from market participants.

The joint position circulated widely on X, including in a post from the analysis account Coin Bureaun

🚨BREAKING: 🇪🇺The and all 27 EU central banks call to scrap MiCA’s rule forcing major stablecoin issuers to keep 60% of reserves in bank deposits. They argue issuers should not face a minimum bank-deposit requirement because volatile stablecoin flows could expose lenders to… pic.twitter.com/oqNYESPM9n

— Coin Bureau (@coinbureau) September 22, 2026

Source: Coin Bureau on X

What the Current Rules Require

Under the existing framework, MiCA requires stablecoin issuers to hold at least 30% of their reserves as bank deposits. For larger and more widely used stablecoins, that requirement rises to 60%.

The ECB and its partner central banks argue that this creates a direct link between stablecoin issuers and banks — a connection that could cause problems if a stablecoin faces a sudden wave of withdrawals. If an issuer has to pull large deposits from a bank quickly, that bank could face a liquidity crunch. The risk is especially pronounced when stablecoin reserves make up a large share of a bank's overall funding.

The central banks also pointed to a concrete precedent: the collapse of Silicon Valley Bank in March 2023. Circle had $3.3 billion of its USDC reserves held at the bank, an exposure that triggered a run on the stablecoin. The episode is the reference point for that concern: a bank failure put redemption pressure on a stablecoin, and, under the rules as written, a redemption wave at a major stablecoin could put funding pressure on a bank.

What the ESCB Proposes Instead

The ESCB wants to replace the deposit rules with minimum liquidity thresholds. Under the proposed approach, a portion of reserves would need to mature within one working day, and a larger portion within five working days.

The European Banking Authority had already drafted similar guidelines in 2024. Those rules called for major stablecoins to hold 40% of reserves in assets maturing within one day, and 60% within five days. The ESCB's proposal follows the same structure, effectively calling for the liquidity-based logic in those guidelines to be written into the regulation itself.

The central banks also identified overnight reverse repurchase agreements and short-term government bonds as suitable alternatives to bank deposits. A shift along those lines would move reserve assets off bank balance sheets and anchor redemption capacity in instruments that can be converted to cash on short notice.

A Warning Echoed by Tether's CEO

Tether CEO Paolo Ardoino raised similar concerns in late 2024, warning of systemic risk to banks. He described a scenario in which a stablecoin holds 10 billion euros in reserves, with 6 billion of that sitting in bank deposits. If the bank lends out 90% of those funds, only 600 million euros would actually be available. That could leave the issuer short of cash if it suddenly needs to meet redemptions — the gap between deposits on paper and cash on hand that liquidity thresholds are designed to close.

The ESCB's new stance echoes that warning closely.

The central banks also flagged a separate enforcement problem: non-compliant crypto companies can still access EU customers, which they say creates risks for investors.

What Happens Next

No changes to MiCA have been confirmed yet. The ESCB's statement is a response to a consultation, meaning regulators will now review the feedback before deciding on next steps. How the review unfolds will determine whether the EU's stablecoin issuers remain tied to bank deposits for a set share of reserves or move to maturity-based liquidity rules — and, for banks, whether stablecoin reserves continue to serve as a funding source.

This report was originally published on CoinCentral.