ESCB Recommends Amending MiCA Bank Deposit Reserve Requirements for Stablecoins
CIE News ·
The European System of Central Banks (ESCB) has submitted a formal consultation response to the European Union regarding the Markets in Crypto-Assets (MiCA) regulatory regime, officially recommending substantial revisions to mandatory commercial bank deposit reserve requirements. The central banking network advises European Union authorities to replace the current fixed-percentage thresholds imposed on stablecoin issuers with a flexible, risk-weighted reserve composition framework. This formal submission directly targets the reserve mechanics governing asset-referenced tokens operating across the European Union.
Under the existing MiCA regulatory framework, mandatory reserve structures enforce strict statutory minimums: standard issuers are required to hold 30% of their reserves as commercial bank deposits, while issuers classified as offering significant asset-referenced tokens must place at least 60% of their reserves within commercial banks. The ESCB’s formal response identifies that these static 30% and 60% deposit reserve mandates create concentration risks. By transitioning away from rigid percentages to a risk-weighted reserve composition, the regulatory architecture would calculate reserve obligations based on targeted risk assessments rather than uniform deposit rules.
The ESCB underscored that reforming these commercial bank deposit reserve requirements is vital to mitigate ongoing liquidity strain on commercial banking institutions. The central banking network warned that mandatory, large-scale stablecoin deposit concentrations increase the danger of systemic runs, as sudden redemptions from major token issuers could rapidly impact commercial banks holding those required reserves. With the recommendation now formally submitted in the European Union's MiCA consultation record, the proposal stands before regulators to determine whether the deposit reserve framework will be amended.