The European Central Bank has urged the European Commission to remove one of MiCA's signature stablecoin provisions: the mandatory requirement forcing issuers to hold a large share of their reserves in bank deposits. According to the ECB, the rule is creating more problems than it solves.

On September 22, the ECB, together with the broader European System of Central Banks (ESCB)—the network that unites the ECB with the national central banks of every EU member state—submitted its formal response to the Commission's consultation on the Markets in Crypto-Assets (MiCA) regulation. Its central recommendation: eliminate the percentage-based bank-deposit mandate entirely and replace it with a framework built around liquidity rather than fixed thresholds.

What the Current Rules Require

Under MiCA as it stands today, issuers of e-money tokens (EMTs)—stablecoins pegged to a single official currency—and asset-referenced tokens (ARTs), which maintain their value by referencing a basket of assets or other values, must park a minimum percentage of their reserves in traditional bank deposits. Tokens classified as "non-significant" face a 30% floor, while "significant" tokens—those with larger market footprints, a designation that also brings heightened supervisory scrutiny—must hold 60%.

The ECB's counterargument is that mandatory deposit requirements expose banks themselves to volatile, potentially flighty funding. If a stablecoin faces a redemption wave, those deposits could vanish from a bank's balance sheet overnight—precisely the kind of instability regulators intended to prevent.

In place of fixed deposit percentages, the ECB proposes a liquidity-focused standard. Under this framework, reserve assets would need to mature within one to five working days, shifting the emphasis from where the money sits to how quickly it can be accessed.

Why It Matters for MiCA 2.0

MiCA's original stablecoin provisions became fully applicable across 2024 and 2025, making Europe the first major jurisdiction to impose a comprehensive regulatory framework on crypto assets. The bank-deposit rule, however, has been a persistent sore spot.

Industry groups such as Bruegel and Blockchain for Europe had already flagged concerns about the concentration risk that mandatory bank deposits create. Their argument: compelling issuers to concentrate reserves in bank deposits not only limits operational flexibility but also creates a systemic vulnerability by tying stablecoin stability to individual banking relationships.

The ESCB's response raised a separate but related concern: enforcement gaps. The central banks flagged significant challenges in ensuring compliance across the EU particularly where non-compliant platforms operating outside European borders can still reach EU users.

How Europe's Approach Compares

The bank-deposit mandate has been one of the features distinguishing MiCA from other regulatory frameworks around the world. The US GENIUS Act—the federal stablecoin statute signed into law in July 2025—takes a different approach, requiring issuers to back tokens one-to-one with assets such as cash and short-term US Treasuries, without imposing the rigid deposit-percentage requirements that MiCA currently enforces.

A 60% bank-deposit requirement for significant tokens materially constrains how issuers can manage and optimize their reserve portfolios. Money held in bank deposits generally yields less than money deployed in short-duration government securities or other high-quality liquid assets.

Notably, the ECB's response treated the issue entirely in macro-financial terms. No specific stablecoin issuers or tokens were singled out.

What to Watch Next

For stablecoin issuers eyeing the European market, a shift from deposit-percentage mandates to liquidity-maturity requirements would lower the operational burden of compliance and could improve the yield issuers generate on their reserves. For a significant stablecoin issuer holding billions in reserves, the gap between bank deposit rates and short-duration government bond yields can translate to hundreds of millions in annual revenue.

For now, the ESCB's position is a formal consultation response rather than a change in law: rewriting MiCA's deposit mandate would require the Commission to table a legislative amendment, which would then need approval from both the European Parliament and the Council.

The enforcement challenges flagged by the ESCB also warrant attention. Even the most carefully designed reserve requirements accomplish little if offshore platforms can serve EU users without complying.

Source: CryptoBriefing — European Central Bank seeks to scrap MiCA's stablecoin reserve rule