The ESCB proposes replacing mandatory bank deposits for reserves, as Tether had requested
The ECB and EU central banks gathered in the European System of Central Banks (ESCB) have asked the European Commission to amend MiCA rules on stablecoin reserves.
The ESCB proposes replacing the requirement to hold at least 30 per cent of reserves with credit institutions, or 60 per cent for significant stablecoins, with minimum liquidity thresholds. The criterion would apply to reserve assets maturing within one and five business days.
According to the ESCB, the current requirement creates a direct link between issuers and credit institutions. In the event of a run on redemptions, the rapid withdrawal of deposits could expose banks to liquidity problems, precisely the issue Tether raised in explaining its decision not to comply.
The document cites overnight reverse repurchase agreements and short-term sovereign securities among the instruments issuers could use to meet liquidity requirements. It also refers to draft European Banking Authority rules published in 2024: for significant stablecoins, they set 40 per cent of reserves in assets maturing within one business day and 60 per cent within five days; for non-significant tokens, the thresholds are 20 per cent and 30 per cent respectively.
The ESCB also reported significant difficulties in applying MiCA, stating that non-compliant digital-asset firms can still reach customers in the EU.
