The European Central Bank and 27 national central banks want the EU to change a central part of its stablecoin rulebook. Their proposed MiCA reserve rule would replace fixed requirements to hold 30% of an issuer's backing in commercial bank deposits, or 60% for a significant token, with tests of how much backing matures within one and five working days. The idea is to make redemption liquidity the explicit target instead of prescribing how much cash sits at banks. Nothing has changed in law yet. The current floors still apply, and a consultation response is a request for future legislation, not permission for issuers to ignore today's reserve obligations.
Why the MiCA reserve rule faces review
Bank deposits can look like a safe way to hold assets backing redeemable tokens. If customers demand cash at once, an issuer can draw from deposits rather than immediately sell bonds into a stressed market. The central banks' argument is that this safeguard can push risk into the banks receiving the money. Stablecoin issuer balances may be much less sticky than household deposits. In a run, a large issuer could remove funds suddenly, forcing the bank to replace funding just as wider markets are under pressure.
The existing 30% and 60% floors make that exposure a structural requirement for issuers operating under MiCA. A significant stablecoin would have to place a majority of backing with commercial banks even if short-term sovereign assets or other permitted holdings offered a different liquidity profile. An earlier central-bank analysis found that drawing down deposits could help a significant issuer handle redemptions equal to as much as 60% of supply without an immediate sovereign-bond sale. That potential protection to bond markets is exactly what could transmit pressure to commercial lenders instead.
The European System of Central Banks proposes setting minimum shares of reserves maturing within one working day and within five working days. Precise levels have not been enacted. Maturity is only one dimension: the issuer also needs reliable access to cash and a workable path to process redemptions. A liquid security that can be sold quickly still depends on functioning markets. A bank deposit that appears immediately available still depends on the bank honoring a large withdrawal. Rulemakers must compare these failure points rather than declare either asset type risk-free.
Tether warned about a similar risk
Tether CEO Paolo Ardoino criticized MiCA's deposit requirement in 2024, arguing that uninsured bank exposures might put token holders at risk when banks face trouble. He pointed to the temporary USDC loss of its dollar peg in March 2023 after Circle disclosed $3.3 billion of reserves at Silicon Valley Bank. His preference for Treasury securities reflected the view that forcing reserves into commercial banks creates a different failure channel from holding short-dated government assets. Tether has not obtained MiCA authorization for USDT, and regulated European trading venues subsequently restricted access to the token.
The overlap between an issuer's concern and the central banks' current proposal does not mean they share every policy preference. Tether focused on the safety of reserves for its holders; the European System of Central Banks emphasizes risks to banking funding and the wider financial system. Both arguments ask what happens when many tokenholders redeem simultaneously. A rule can protect the issuer from one type of forced sale while exposing a commercial bank to a fast-moving withdrawal.
MiCA's effect is visible in exchange listings. European platforms reduced or ended support for non-authorized USDT trading pairs as implementation advanced. A change in reserve rules might alter the economics and risk calculus for some issuers, but it would not automatically grant authorization to any particular token. Licensing, governance, custody, redemption rights and other requirements still matter. Investors should not read a recommendation to amend bank-deposit floors as news that previously restricted trading pairs have returned.
A consultation, not a legal amendment
The European Commission ran its MiCA review consultation from May 20 through Aug. 31, seeking comments from token issuers, banks, market participants, academics and supervisors. Feedback will feed a report required under the regulation; the Commission could propose legislation if it concludes amendments are needed. A recommendation from monetary authorities is influential, but a legislative process would still have to decide the actual percentages, eligible assets and transition rules. Until then the 30% and 60% deposit obligations remain in place.
The contrast with the United States helps define the policy choice. The GENIUS Act's permitted backing includes cash, certain deposits, short-term Treasuries and qualifying Treasury-backed instruments, without MiCA's fixed commercial-bank percentage. U.S. issuers still need full backing and liquidity controls; the absence of a deposit floor does not make their reserves unrestricted. Agora's pursuit of a U.S. national trust-bank charter shows that issuer supervision is a separate question from choosing which assets back tokens.
European central bankers have also proposed widening restrictions on stablecoin yields distributed through affiliated platforms and lending products. That is a distinct issue. Returns on reserves finance issuer operations and sometimes partner payments, as illustrated by Circle's commercial USDC arrangement with Binance. Rules on backing influence the economics of such deals, but the consultation has not cancelled them. Combining the yield proposal with the reserve proposal into a single enacted crackdown would misstate both.
What a liquidity test must prove
For a revised rule to be better than a fixed deposit minimum, supervisors need to test a genuine redemption shock. How much cash arrives within one day? How much within five? Are assets concentrated at one custodian or bank? Can the issuer monetize short-term securities without causing losses or relying on an unavailable counterparty? Answers should be reported in terms investors can compare, not hidden in an asset label that sounds safe during normal trading.
A change might lower required commercial-bank exposure while preserving rapid redemption capacity. It might also force issuers to adjust portfolios, custody arrangements and disclosures. The present proposal does not specify a new binding reserve mix or a date on which issuers must change holdings. The next event worth watching is the Commission's review report and any text of a legislative amendment. Until that arrives, a safer-sounding liquidity standard remains an argument to lawmakers rather than a rule issuers can use.
