The European Central Bank system (ESCB) is pushing for a key revision to the stablecoin reserve rules under the EU’s (Crypto-Asset Markets Regulation) (MiCA): it would remove the current hard lower limit requiring issuers to hold at least 30% of reserves in the form of bank deposits, and replace it with liquidity thresholds broken down by time to maturity. The direct motivation for this change is not to loosen regulation. Rather, the central bank system is concerned that if a stablecoin experiences a wave of concentrated redemptions, issuers will be forced to quickly withdraw large amounts of deposits from banks—thereby passing redemption pressure on to the banking system.

In its MiCA review consultation response submitted to the European Commission in September 2026, the ESCB explicitly proposed deleting the minimum bank deposit requirements for asset-referenced tokens (ARTs) and e-money tokens (EMTs), replacing them with a minimum proportion of reserve assets that mature “within 1 business day and within 5 business days.” The document also uses the technical standards drafted by the European Banking Authority (EBA) starting in 2024 as the calibration baseline: for significant stablecoins, at least 40% of reserve assets must mature within 1 business day and 60% within 5 business days; for less significant tokens, the corresponding figures are 20% and 30%. The response was published on Tuesday on the ECB’s website, marking one of the first systematic assessments of the regulatory framework after MiCA has been implemented for several years.

Why did the bank deposit requirement end up becoming a risk source?

Under MiCA’s current rules, stablecoin issuers must hold at least 30% of their reserves in the form of bank deposits, and the threshold is even higher for stablecoins deemed “significant,” reaching 60%. The intent behind this design is straightforward: bank deposits are viewed as safe assets that can be mobilized at any time, ensuring holders can redeem at any time. But the ESCB points out that this arrangement creates a “direct link between issuers and credit institutions” and, in doing so, actually creates a new channel for risk contagion.

The ESCB explicitly warns in the document that if a stablecoin experiences a bank run, issuers need to withdraw deposits quickly to meet redemptions, which could put the banks receiving those deposits under liquidity strain. In other words, the bank deposit requirements that regulation originally used to protect holders may, in extreme cases, transfer pressure from the stablecoin market to the banking system. For central banks, this is not only a redemption problem for a single institution—it could evolve into liquidity shocks in interbank markets.

The new liquidity interval approach shifts attention from “where the money is placed” to “how long the assets take to become liquid.” Following the ESCB’s recommendations, issuers can use overnight repos and short-term sovereign bonds to meet liquidity requirements, without having to park large sums on their balance sheet as bank assets. Reverse repos provide short-term funding secured by high-quality assets such as government bonds, and sovereign bonds themselves are also highly liquid assets—both can be monetized within a very short time. If this change is implemented, it will directly affect the reserve-asset allocation structure of stablecoin issuers and may also change the size of funding sources banks receive from stablecoin deposits.

EBA technical standards are brought to the forefront; supervisory focus shifts from custody to maturity matching

This time, the ESCB did not propose a new ratio out of thin air. It explicitly cited draft technical standards for liquidity requirements published by the EBA in 2024 and called for them to be “implemented swiftly.” The EBA draft sets tiered liquidity intervals for significant stablecoins and non-significant tokens: for significant stablecoins, at least 40% of reserve assets mature within 1 business day and 60% within 5 business days; for non-significant tokens, the figures are 20% and 30%. In essence, this framework measures redemption capability by the maturity structure rather than the custody location.

From a regulatory logic perspective, this means that the supervisory focus for EU stablecoin regulation is shifting from “custodial compliance” to “maturity-matching of the balance sheet.” The former concerns who holds the funds, while the latter concerns whether assets can be liquidated in a timely manner under redemption pressure. For issuers, the maturity-matching requirement is actually more stringent: although bank deposits are considered safe, if they are withdrawn in a concentrated manner they could stress banks; whereas reserves spread across reverse repos and short-term sovereign bonds can meet redemption needs without relying on a single bank.

However, in the same response, the ESCB also acknowledges that MiCA implementation still faces “substantial challenges.” Even though the EU has set up a licensing regime, non-compliant crypto firms can still reach EU customers. This means that no matter how reserve rules are adjusted, regulatory arbitrage will remain as long as cross-border access and enforcement coordination issues are not resolved. This candor also signals to the market that technical revisions to reserve rules are only part of the MiCA review; enforcement capacity likewise determines the real-world effectiveness of regulation.

Coordinated position: keep the interest prohibition in place; keep the bank issuance route open

Beyond liquidity rules, the ESCB also proposed a series of accompanying positions, outlining the central bank system’s overall stance toward the stablecoin framework. First is maintaining the ban on paying interest on stablecoins. The purpose of this ban is to prevent stablecoins from accelerating capital flows through competition for yield during periods of stress, thereby amplifying financial volatility. If interest were allowed, stablecoins could become more like bank deposits, triggering broader disintermediation risks.

Second is the choice of issuance route. The ESCB supports maintaining the possibility under MiCA for credit institutions to issue electronic money tokens (EMTs) directly via a balance-sheet model, and it also allows issuance through subsidiaries of electronic money institutions (EMIs). However, it clearly does not support making “issuance through an EMI subsidiary” a mandatory route under EU law. The central bank system believes that while an EMI subsidiary model offers advantages such as ring-fencing risks, similar effects can be achieved through clear legal definitions, appropriate disclosure requirements, and the existing regulatory framework; forcing a switch would instead increase institutional costs.

In addition, the ESCB recommends re-evaluating reserve-asset and own-funds requirements for non-bank EMT/ART issuers, and supports strengthening prudential requirements for “significant” crypto asset service providers (CASPs), including requiring them to establish an intermediate parent company within the EU. These proposals align with and echo the regulatory integration and regulatory package reforms the EU is currently advancing.

Further implications for the EU stablecoin ecosystem

For stablecoin issuers, shifting from a minimum level of bank deposits to liquidity intervals means that the professional requirements for reserve management increase significantly: assets’ maturity profiles must be arranged more precisely, and a portfolio combination must be used among reverse repos, short-term sovereign bonds, and bank deposits. Compliance teams cannot only monitor the custodian bank’s qualifications; they must also build the capability to monitor maturity mismatches and conduct stress testing.

For banks, the impact is two-sided. If the share of stablecoin deposits declines, banks may lose some portion of relatively stable, low-cost funding sources. At the same time, banks also reduce their tail risk of being hit by concentrated withdrawals of stablecoin funds, which improves the predictability of the balance sheet. For central banks and financial stability authorities, weakening the rigid link between stablecoins and the banking system helps isolate contagion pathways in the next round of market stress.

It should be emphasized that this document is still a consultation response. Whether it will ultimately be written into the MiCA amendment text depends on the European Commission’s review results and the subsequent legislative process. Key variables to watch include: whether the specific calibration of liquidity intervals fully adopts the EBA draft proportions; whether short-term sovereign bonds and reverse repos are formally included in the list of eligible reserve assets; whether the criteria for determining a “significant stablecoin” will be adjusted in parallel; and whether the interest ban can withstand industry lobbying pressure at the political level.

For stablecoin projects operating in the EU or serving EU users, managing the maturity structure of reserve assets is becoming a more central compliance capability than choosing a custodian bank. MiCA was the world’s first comprehensive regulatory framework covering crypto assets. This review on how to balance financial stability with space for innovation will also serve as a reference for stablecoin legislation in other jurisdictions.