ECB asks Brussels to rewrite how stablecoin reserves are held
The ECB and the EU national central banks have filed a formal recommendation into the European Commission's MiCA review: drop the rule that forces part of a stablecoin's reserve into bank deposits, and replace it with a requirement that a share of the reserve sit in assets maturing within one to five working days. For significant tokens the deposit floor today is 60%.
Three things worth separating.
1. The test changes category. A deposit rule asks where the money is parked. A maturity rule asks how fast it can be turned into cash. Only the second one is measured against the thing that actually breaks an issuer: a redemption queue.
2. The objection is that the current rule moves the risk rather than removing it. Reserve deposits are not ordinary customer balances, they can be pulled in one block when holders redeem, so a safeguard written for the token hands the shock to the bank.
3. This is a consultation response, not a rule change. The Commission drafts, and the co-legislators decide what survives.
What to watch: whether the final text keeps a percentage floor at all, or moves entirely to a maturity ladder.
Not financial advice. Do your own research.
#MiCA #Stablecoins #Regulation
The ECB and the EU national central banks have filed a formal recommendation into the European Commission's MiCA review: drop the rule that forces part of a stablecoin's reserve into bank deposits, and replace it with a requirement that a share of the reserve sit in assets maturing within one to five working days. For significant tokens the deposit floor today is 60%.
Three things worth separating.
1. The test changes category. A deposit rule asks where the money is parked. A maturity rule asks how fast it can be turned into cash. Only the second one is measured against the thing that actually breaks an issuer: a redemption queue.
2. The objection is that the current rule moves the risk rather than removing it. Reserve deposits are not ordinary customer balances, they can be pulled in one block when holders redeem, so a safeguard written for the token hands the shock to the bank.
3. This is a consultation response, not a rule change. The Commission drafts, and the co-legislators decide what survives.
What to watch: whether the final text keeps a percentage floor at all, or moves entirely to a maturity ladder.
Not financial advice. Do your own research.
#MiCA #Stablecoins #Regulation