The European System of Central Banks, comprising the European Central Bank and the national central banks of all 27 EU member states, has formally asked the European Commission to eliminate mandatory bank-deposit requirements for stablecoin reserves under the Markets in Crypto-Assets Regulation. The recommendation, submitted on September 22 as part of the Commission’s ongoing review of MiCA, seeks to replace the current thresholds with rules focused on how quickly reserve assets can be converted into cash.

Current MiCA Reserve Requirements and the Proposed Shift

Under existing MiCA rules, ordinary e-money token issuers must hold at least 30 percent of their reserves as deposits with credit institutions. For tokens classified as significant, based on criteria such as market value, number of holders, transaction volume and systemic links, the floor rises to 60 percent. The remaining reserves may be invested in secure, low-risk and highly liquid instruments.

The ESCB proposes scrapping both the 30 percent and 60 percent deposit mandates. In their place, it recommends minimum proportions of reserves held in assets that mature or can be settled within one working day and within five working days. Suitable instruments cited include overnight reverse repurchase agreements and short-term sovereign bonds. This approach draws on draft technical standards previously prepared by the European Banking Authority, which set similar maturity-based thresholds of 40 percent within one day and 60 percent within five days for significant tokens, and 20 percent and 30 percent respectively for non-significant ones.

Liquidity Risks for Commercial Banks

Central banks argue that the deposit floors create a direct transmission channel between stablecoin activity and the banking system. Deposits placed by issuers are treated by banks as liabilities that can be withdrawn in full at short notice. ECB analysis indicates that banks typically assume a 100 percent outflow rate for deposits linked to electronic money institutions, compared with roughly 5 percent for ordinary retail deposits.

In a period of market stress, simultaneous redemptions by token holders could compel issuers to withdraw large sums from commercial banks at the same time. An ECB study published earlier in 2026 noted that a significant e-money token issuer could meet redemptions equal to as much as 60 percent of its circulating supply simply by drawing down mandated bank deposits, before needing to sell any sovereign bonds. While this structure may initially shield government-bond markets from forced sales, it shifts liquidity pressure onto the banks holding the deposits.

The euro-denominated stablecoin market remains modest. ECB figures show its combined value stood at approximately 450 million euros, or about 516 million dollars, in January 2026, having grown from around 50 million euros in early 2024. This is still a fraction of the roughly 300 billion dollars in dollar-denominated stablecoins. Nevertheless, the ESCB has flagged the potential scale of future risk: a single significant token reaching 50 billion euros in issuance would, under current rules, require at least 30 billion euros to be held as bank deposits.

Industry Perspectives and Earlier Warnings

The deposit requirements have already shaped market access in the European Union. Tether, the issuer of the largest dollar stablecoin, declined to seek MiCA authorization, citing the same bank-deposit floor. In 2024, Tether’s chief executive, Paolo Ardoino, argued that the structure could expose both issuers and token holders to bank failures, particularly given that EU deposit insurance is capped at 100,000 euros.

Ardoino has previously pointed to the March 2023 collapse of Silicon Valley Bank, when Circle disclosed that 3.3 billion dollars of USDC reserves were held at the failed institution, triggering a temporary de-peg. Several major European platforms subsequently restricted or delisted USDT trading pairs for regulated users. Circle’s euro stablecoin, EURC, which is MiCA-compliant and reported roughly 411 million euros in circulation, could also face adjustments to its reserve composition if the rules change.

Broader Review Process and Enforcement Concerns

The ESCB response forms part of the European Commission’s formal review of MiCA, which became fully applicable across the EU in December 2024, with stablecoin provisions applying from June 2024. A public consultation remains open until September 30. Feedback will inform an application report, and the Commission may attach legislative proposals if it concludes that amendments are warranted. Until any revision is enacted through the ordinary legislative procedure, the existing 30 percent and 60 percent deposit floors continue to apply.

Beyond reserve composition, the central banks also highlighted enforcement difficulties. They noted material challenges in preventing non-compliant crypto firms from continuing to serve EU customers, potentially placing authorized issuers at a competitive disadvantage. The ESCB further supported the European Systemic Risk Board’s view that multi-issuance models involving entities outside the EU raise additional equivalence and safeguard questions.

Any eventual change would alter how euro stablecoin issuers allocate reserves, select banking counterparties and manage asset duration, while reducing the volume of potentially unstable deposits concentrated in the commercial banking sector.