The current 30% and 60% requirements

Under the European Union's MiCA framework, affected stablecoin issuers must keep a substantial portion of the assets backing their tokens as deposits at European credit institutions. The minimum is 30%, rising to 60% for stablecoins designated as significant.

The logic is straightforward. Bank deposits provide issuers with a pool of assets that can be accessed to meet redemption requests, while the rest of the reserve is also subject to liquidity and risk restrictions.

The ECB and EU national central banks now want that fixed allocation to bank deposits removed. Their recommendation, reported on September 22, would replace the current approach with requirements focused more directly on how quickly reserve assets can be turned into cash.

Stablecoin deposits behave differently from retail deposits

The concern is not simply the amount of money sitting in banks. A traditional bank deposit base is spread across large numbers of households and businesses. A stablecoin issuer can instead place a very large amount of reserves with a relatively small number of institutions.

If stablecoins grow by drawing money away from conventional deposits, issuers may effectively aggregate those funds and redeposit part of them at banks. The banking system may still receive deposits, but they become more concentrated and potentially more sensitive to rapid redemption flows.

That distinction becomes important during a run. If stablecoin holders demand their money back at scale, issuers need to mobilise reserve assets quickly. Large bank deposits held by the issuer can therefore disappear rapidly, potentially transferring stress from the stablecoin market into bank funding.

The ECB had already identified the problem

The recommendation follows months of public analysis from the ECB. In June, the central bank noted that MiCA's 30% and 60% deposit requirements were intended to improve reserve liquidity and limit banking disintermediation.

It also warned that the same design could increase contagion between stablecoins and banks. The link works both ways. Trouble at a bank can threaten access to stablecoin reserves, while a run on a stablecoin can force an issuer to withdraw a large block of deposits from the banking system.

USDC provided a practical example in March 2023. Circle held part of its reserves at Silicon Valley Bank when the lender failed, creating uncertainty over those funds and temporarily pushing USDC away from its one-dollar peg.

Liquidity rather than a mandatory deposit allocation

The central banks are not proposing that issuers should be free to back stablecoins with illiquid or speculative assets. Their alternative would require an adequate share of reserves to consist of assets that mature or can be converted into liquidity within roughly one to five business days.

That changes the regulatory test. Instead of treating a fixed amount of bank deposits as the primary liquidity buffer, supervisors would focus more directly on whether an issuer can generate cash quickly enough to satisfy redemptions.

MiCA already requires invested reserve assets to be highly liquid and carry minimal market, credit and concentration risk. Any eventual reform would still have to operate within a broader prudential framework for the quality and availability of those reserves.

Euro stablecoins are still small

The immediate market is modest. ECB analysis put the market capitalisation of euro-denominated stablecoins at roughly €450 million in January 2026, up from about €50 million at the beginning of 2024.

Dollar-denominated stablecoins were worth around $300 billion over the same period. The policy question is therefore less about the current footprint of euro stablecoins than about the banking consequences if their adoption grows by several orders of magnitude.

Reserve rules are being designed before such tokens become large enough to materially reshape bank funding or sovereign-bond demand. That makes the composition of those reserves a structural issue rather than simply a crypto-market technicality.

MiCA has not changed yet

The central-bank recommendation does not repeal the existing deposit requirements. Any amendment would need to pass through the European regulatory process. Issuers therefore remain subject to the current MiCA framework unless and until the rules are formally changed.

What has changed is the direction of the debate. Regulators are no longer looking only at whether stablecoins are sufficiently backed. They are increasingly examining how reserve assets move during stress and whether a prudential rule can itself create a new concentration of financial risk.

Multi-issuance remains another concern

European central banks are also concerned about multi-issuance arrangements in which economically interchangeable versions of a stablecoin are issued across several jurisdictions.

Such structures make it harder to determine where reserve assets sit and how redemption claims would be met if EU tokens are linked to issuance outside the bloc. The central banks argue that strong safeguards and regulatory-equivalence assessments would be necessary if European rules were ever changed to accommodate such models more broadly.

That makes the latest recommendation less straightforward than a conventional deregulatory move. The ECB is asking to remove a numerical requirement because it believes the requirement can generate its own financial-stability risk. The focus would move from how much money an issuer keeps at a bank to how rapidly the reserve as a whole can actually meet redemptions.