European central banks are asking European Union lawmakers to rethink how stablecoin reserves are regulated under the Markets in Crypto Assets framework, known as MiCA. Their central argument is that fixed quotas for bank deposits can create fragile funding links between stablecoin issuers and commercial banks. Under current rules, issuers must hold at least 30 percent of reserves in bank deposits, and that requirement rises to 60 percent for tokens classified as significant. The European System of Central Banks wants those deposit floors removed and replaced with rules that focus on how quickly reserve assets can be converted into cash.
The alternative approach draws on European Banking Authority standards that emphasize liquidity and maturity. For significant stablecoins, at least 40 percent of reserves would need to mature within one working day, and 60 percent would need to mature within five days. For non-significant tokens, the proposed thresholds are 20 percent within one working day and 30 percent within five days. This framework would push issuers toward very short-term sovereign bonds, overnight repurchase agreements, and similar instruments, while reducing the pressure to keep large balances in commercial bank accounts.
For banks, the aim is to limit contagion risk from concentrated stablecoin deposits that can leave quickly during a redemption run. Central bank commentary and coverage of the proposal have repeatedly highlighted this concern. For issuers, a liquidity maturity rule could be more flexible than a hard deposit percentage. It could also allow more reserves to be held in short-term government debt, which often yields more than bank deposits. At the same time, central banks want to reinforce MiCA’s ban on stablecoin remuneration. Their proposal would explicitly cover lending, borrowing, staking, and layered products that make stablecoins resemble savings accounts.
The practical result may be mixed. Issuers could gain more freedom to earn yield on reserve assets, but European users are unlikely to see interest-bearing stablecoin products. Dollar stablecoins would also face closer scrutiny because of bank and financial stability risks. The changes are not law yet. The European Commission’s MiCA consultation runs through late September 2026, and policymakers expect a legislative revision around 2027. That revision would need approval from both the European Parliament and member states.
Until MiCA is amended, the existing 30 percent and 60 percent deposit rules still apply. This is one reason some platforms have restricted USDT and other stablecoins in the European Union. The European System of Central Banks has also pointed to enforcement gaps, noting that non-compliant offshore platforms can still reach EU customers. At the same time, regulators are developing alternatives such as the Pontes system, which is intended to settle tokenized assets directly in central bank money.
If the liquidity rules and the expanded yield ban are adopted, the effects could be broad. They may influence which stablecoins exchanges choose to support, how euro stablecoins are structured, and whether issuers such as Tether reconsider EU licensing once the reserve framework changes. The overall direction is clear. EU central banks want to contain the systemic risk that large stablecoin reserves pose to commercial banks while keeping stablecoins in the category of payments rather than savings. If their proposals become part of MiCA, the European market could move toward highly liquid, tightly supervised stablecoins with less user yield but potentially more resilient backing and a clearer separation from bank funding.
