EU central banks challenge MiCA stablecoin deposits

TLDR

EU central banks are pushing to remove MiCAs requirement that stablecoin issuers park large portions of reserves in bank deposits and replace it with short-term liquidity rules.

1. MiCA currently forces stablecoin issuers to keep 30% (and 60% for significant tokens) of reserves in commercial bank deposits, a rule central banks now want scrapped in favor of liquidity-based thresholds.
2. The European System of Central Banks argues these big, unstable deposits could transmit stress from stablecoin runs into banks, while issuers like Tether have warned the same rule creates concentration and counterparty risk.
3. The proposal sits inside the official MiCA review, so nothing has changed yet, but the outcome could reshape EU stablecoin reserve models, yields, and licensing over the next regulatory cycle.

Confidence: high, based on multiple official and media reports.

Deep Dive

1. MiCAs Deposit Rule And The Proposed Replacement

Under MiCA, regular stablecoin issuers must hold at least 30% of reserves as deposits at credit institutions, rising to 60% for significant tokens, as described in the MiCA bank-deposit rule summary.

In their joint response to the European Commissions MiCA review, the European System of Central Banks (ESCB) called for deleting these fixed deposit floors and instead requiring minimum portions of reserves in assets that mature within one and five working days, such as repos and short-term sovereign bonds, according to liquidity threshold proposals.

Draft European Banking Authority standards cited by the ESCB would set maturity-based thresholds, for example 40% and 60% within one and five days for significant tokens, and 20% and 30% for non-significant tokens, shifting focus from where reserves sit to how fast they can be tapped.

2. Why Central Banks See Deposit Risk

The ESCB warns that deposits from stablecoin issuers behave differently from traditional household deposits and can leave very quickly during market stress, potentially draining bank liquidity if issuers must redeem a large share of tokens at once, as outlined in their consultation response.

This mirrors concerns from issuers: Tether refused to seek a MiCA license largely because the 60% deposit floor would concentrate billions of euros in commercial banks, exposing holders to bank failure and limited deposit insurance, as noted in Tethers critique of the rule.

3. What To Watch In The MiCA Review

MiCAs stablecoin provisions began applying in 2024 and are now under formal review, with the ESCBs recommendations feeding into a broader legislative revision process expected over the coming years, according to coverage of the review timeline.

In parallel, central banks want MiCAs ban on paying interest on stablecoins expanded to cover lending, borrowing, staking, and other indirect yield setups, aiming to stop stablecoins from behaving like bank deposits, as detailed in their yield-ban proposal.

Until lawmakers amend MiCA, the 30% and 60% deposit floors and existing remuneration bans remain in force, so issuers and exchanges must comply with the current framework while preparing for possible liquidity-focused rules.

Conclusion

EU central banks are not attacking stablecoins themselves so much as the way MiCA ties their reserves to bank balance sheets and deposit-like yields.

If the proposed changes are adopted, EU stablecoins could gain more flexibility to hold highly liquid securities instead of large bank deposits, while facing tighter prohibitions on offering returns.

For crypto users and issuers, the key signal is whether the next MiCA revision shifts from fixed bank deposits to maturity-based liquidity, which would reshape both risk and business models for euro-area stablecoins.