Tether’s decision not to seek authorization under the European Union’s Markets in Crypto-Assets Regulation (MiCA) has drawn renewed attention after the European Central Bank (ECB) and national central banks questioned the reserve requirements that influenced the company’s position. MiCA is the bloc’s unified rulebook for crypto-asset issuance and services, and stablecoins operating in the EU fall within its scope.

Tether CEO Paolo Ardoino said the issuer declined to apply for a MiCA license because significant stablecoins are required to hold at least 60% of their reserves in commercial bank deposits. Ardoino has argued that concentrating reserves with banks could increase counterparty risk rather than strengthen the safety of stablecoin backing.

Tether CEO Says Company Refused to Apply for EU MiCA License Over Stablecoin Reserve Rule Tether CEO Paolo Ardoino said the company refused to apply for an EU MiCA license because of the rule requiring major stablecoin issuers to hold at least 60% of their reserves in commercial… pic.twitter.com/6ot9JnUe5g — Wu Blockchain (@WuBlockchain) September 22, 2026

The argument now partly overlaps with concerns raised by the ECB and central banks across the EU. Those institutions have recommended removing fixed deposit thresholds and replacing them with liquidity requirements, although the existing MiCA rules remain in effect.

MiCA Reserve Requirements and Tether’s Objection

MiCA requires e-money token issuers to hold at least 30% of their backing funds in deposits with credit institutions. That threshold rises to 60% when a stablecoin is designated as significant — a category reserved for the largest and most widely used tokens. The remainder of the reserves may consist of secure and highly liquid assets, allowing issuers to keep part of their backing outside the banking system.

Ardoino has opposed the mandatory concentration of reserves in commercial deposits. His concern is that a bank failure could temporarily restrict access to funds needed to process stablecoin redemptions. The collapse of Silicon Valley Bank in 2023 provided a prominent example of that exposure.

Circle disclosed that $3.3 billion backing USDC was held at Silicon Valley Bank when regulators closed the lender. The episode briefly heightened concerns about reserve access and stablecoin liquidity. The ECB has also referred to the event in its assessment of the risks associated with deposit requirements.

According to the ECB, bank failures could expose stablecoin issuers to losses while strengthening the links between crypto markets and commercial lenders. Tether uses a different reserve structure. At the end of June, the company reported $184.6 billion in USDT outstanding. Its reserves were concentrated primarily in U.S. government-backed instruments and short-term liquidity, while reported assets exceeded liabilities by approximately $4.11 billion.

ECB Proposes Liquidity-Based Approach

The European System of Central Banks has recommended abandoning fixed minimum percentages for stablecoin reserves held in commercial bank deposits. Instead, it proposed liquidity requirements based on assets capable of maturing within one working day and five working days.

The recommendation reflects broader financial-stability concerns. European central banks warned that the growth of stablecoins could alter the funding structure of lenders in the region. Stable retail deposits could increasingly be replaced by larger deposits from stablecoin issuers, while those balances could be more volatile during periods of heavy redemptions.

A broad stablecoin run could force issuers to withdraw substantial amounts from banks quickly, potentially increasing liquidity pressure on institutions with significant exposure. The central banks’ recommendation therefore addresses both the accessibility of stablecoin reserves and the possible effects of those reserves on the wider banking system.

The proposal does not immediately amend MiCA. Any change would still have to pass through the EU’s regulatory process before the existing framework could be revised. The 30% and 60% deposit thresholds consequently remain effective. How quickly that process moves, and whether it produces revisions to the reserve rules Tether cited, will shape the framework issuers face when weighing European licensing.

Tether remains without MiCA authorization for USDT, despite the growing official scrutiny of the reserve rule that the company has identified as a key reason for not seeking European licensing. The original report was published by Blockonomi.