The European Central Bank (ECB) and the central banks of the EU's 27 member states want the European Union to reconsider a rule that requires stablecoin issuers to hold a fixed share of their reserves in bank deposits, arguing the requirement could turn a run on a stablecoin into a funding problem for commercial banks, Reuters reported on September 22.

In place of the deposit quota, the central banks favor requiring issuers to hold a minimum share of reserves in assets that mature within one to five working days. The proposal addresses how quickly issuers can turn their reserves into cash without making them dependent on large, immediately withdrawable bank balances.

The rule under challenge

Under the current Markets in Crypto-Assets Regulation (MiCA), the EU's comprehensive framework for crypto-asset markets that was phased in through 2024, an electronic money institution issuing an e-money token — MiCA's category for stablecoins pegged to a single official currency such as the euro — must generally hold at least 30% of the relevant funds with credit institutions. The threshold rises to 60% when a token receives MiCA's formal “significant” classification — a regulatory designation based on several criteria, such as the number of holders and the scale of transaction activity, not simply the token's circulating value.

The ECB has not reported a bank loss caused by the requirement. Its warning is forward-looking: it concerns what could happen if regulated euro stablecoins become much larger.

Following €1 billion through the current system

Consider a simplified example involving a significant euro stablecoin with €1 billion in circulation. The issuer keeps only the required minimum in bank deposits and places the remaining reserves in other eligible assets. In practice, the money would normally be divided among several banks, so the full withdrawal would not necessarily fall on one institution. The example nonetheless shows the direction of the flow: token holders receive euros, the stablecoin supply contracts, and reserve deposits leave the banking system.

Who is protected, and who absorbs the outflow

A bank deposit is a liquid asset for the stablecoin issuer. For the bank holding it, the same money is a liability that must be returned when requested. Reserve deposits can also behave differently from ordinary savings: household withdrawals occur for many unrelated reasons, while a stablecoin issuer may need to move a large amount at once because its customers are responding to the same market event.

According to the ECB's analysis of euro stablecoins, deposits placed by electronic money institutions carry a 100% outflow rate in bank liquidity calculations. This is a regulatory stress assumption, not a forecast that every euro will leave, but it requires the bank to prepare for that possibility. Certain retail deposits, by comparison, were assigned an expected outflow of only 5% in the ECB's example. Outflow rates of this kind determine how much liquid-asset buffer a bank must hold against each form of liability.

Money that leaves customer accounts to purchase a non-bank stablecoin may therefore return to the banking sector as a less stable form of funding — the cost on the's side of the balance sheet. The issuer receives something valuable in return: cash that can meet redemptions before securities must be sold.

The trade-off cuts three ways:

• Token holders — the deposit buffer gives the issuer cash for processing redemption requests.
• Reserve banks — the same deposits can leave quickly when redemptions accelerate.
• Bond markets — using deposits first can delay forced sales of government debt.

The ECB estimated that a significant e-money token could theoretically meet redemptions equal to 60% of its supply by drawing down deposits before selling sovereign bonds. MiCA therefore protects holders and reduces the risk of bond fire sales partly by asking banks to accept funding that may leave quickly.

What the ECB proposes instead

The central banks want liquidity requirements based on when reserve assets mature rather than a fixed bank-deposit quota. Maturity is different from saleability. If a high-quality security matures tomorrow, the issuer receives cash without having to find a buyer or accept the current market price. A longer-dated bond may be tradable, but selling it early can produce a loss when interest rates or market conditions have changed.

Assets maturing within one to five working days could reduce issuers' reliance on wholesale deposits while preserving access to cash. Issuers would still face redemption-timing, asset-concentration and credit-quality risks. The recommendation concerns reserve composition only; it does not remove MiCA's broader obligations covering backing, safeguarding and redemption.

Why the ECB is asking now

If euro stablecoins remain small, why is the ECB seeking a change? Its published analysis estimated the combined market capitalization of euro-denominated stablecoins at approximately €450 million in January 2026, up from about €50 million at the beginning of 2024. Dollar-denominated stablecoins, by comparison, were worth roughly $300 billion.

The concern is therefore forward-looking. If a €50 billion token were classified as significant, the current rule would direct at least €30 billion into bank deposits.

As an existing backstop, the ECB's April analysis described draft safeguards intended to spread reserve deposits among banks and limit an individual bank's exposure to one stablecoin. These controls reduce concentration, but they do not make the funding less likely to leave.

Nothing has changed in MiCA yet

The central banks submitted their position to the European Commission's targeted review of MiCA. The consultation remains open until September 30. The Commission will use the responses to assess how the regulation has worked and may later present a legislative proposal; any amendment would need approval from the European Parliament and the Council before taking effect. The ECB cannot change MiCA through a consultation response, so the existing 30% and 60% thresholds remain in force.

The recommendation arrived one day after the ECB launched its Pontes settlement bridge. Pontes gives regulated tokenized wholesale markets access to central-bank money, while the MiCA review addresses the risks created when private digital money relies on commercial-bank balance sheets.

The Commission's test is whether an alternative can preserve rapid redemptions without turning stablecoin reserves into flight-prone bank funding. Removing the deposit quota before that replacement is defined would exchange one liquidity problem for another.

This article is provided for informational purposes only and does not constitute financial, legal or investment advice. Stablecoin regulation and reserve requirements may change as the MiCA review continues.

Source: Coindoo