MiCA requires electronic money institutions issuing significant stablecoins to keep most reserve funds with banks. The ECB warns that this protection could transmit a redemption shock into lenders.
Key Takeaways
- Significant issuers face a 60% deposit requirement.
- Redemptions can rapidly remove bank funding.
- Deposits also prevent forced bond sales.
- The ECB prefers short-maturity reserve assets.
- No MiCA rule has changed yet.
The ECB wants MiCA’s deposit rule reconsidered
The European Central Bank and the EU’s 27 national central banks oppose requiring stablecoin issuers to keep a fixed share of their reserves in bank deposits, Reuters reported on September 22.
They instead want a minimum share of reserves held in assets that mature within one to five working days. The proposal addresses how quickly issuers can turn their reserves into cash without making them dependent on large, immediately withdrawable bank balances.
Under the current Markets in Crypto-Assets Regulation, an electronic money institution issuing an e-money token must generally hold at least 30% of the relevant funds with credit institutions. The threshold rises to 60% when the token receives MiCA’s formal “significant” classification.
Significance is a regulatory designation based on several criteria, not simply the token’s circulating value. The ECB has not reported a bank loss caused by the requirement; its warning concerns what could happen if regulated euro stablecoins become much larger.
Follow €1 billion through the current system
Consider a simplified example involving a significant euro stablecoin with €1 billion in circulation. The issuer keeps only the required minimum in bank deposits and places the remaining reserves in other eligible assets.
The money would normally be divided among several banks, so the full withdrawal would not necessarily fall on one institution. The example shows the direction of the flow: token holders receive euros, the stablecoin supply contracts and reserve deposits leave the banking system.
Who is protected, and who absorbs the outflow
A bank deposit is a liquid asset for the stablecoin issuer. For the bank holding it, the same money is a liability that must be returned when requested.
Reserve deposits can behave differently from ordinary savings. Household withdrawals occur for many unrelated reasons, while a stablecoin issuer may need to move a large amount at once because its customers are responding to the same market event.
The ECB’s analysis of euro stablecoins says deposits placed by electronic money institutions carry a 100% outflow rate in bank liquidity calculations. This is a regulatory stress assumption, not a forecast that every euro will leave. It requires the bank to prepare for that possibility.
Certain retail deposits, by comparison, were assigned an expected outflow of only 5% in the ECB’s example. Money that leaves customer accounts to purchase a non-bank stablecoin may therefore return to the sector as a less stable form of bank funding.
That is the cost on the bank’s side of the balance sheet. The issuer receives something valuable in return: cash that can meet redemptions before securities must be sold.
Token holders
The deposit buffer gives the issuer cash for processing redemption requests.
Reserve banks
The same deposits can leave quickly when redemptions accelerate.
Bond markets
Using deposits first can delay forced sales of government debt.
The ECB estimated that a significant e-money token could theoretically meet redemptions equal to 60% of its supply by drawing down deposits before selling sovereign bonds. MiCA therefore protects holders and reduces the risk of bond fire sales partly by asking banks to accept funding that may leave quickly.
What the ECB proposes instead
The central banks want liquidity requirements based on when reserve assets mature rather than a fixed bank-deposit quota.
Maturity is different from saleability. If a high-quality security matures tomorrow, the issuer receives cash without finding a buyer or accepting the current market price. A longer-dated bond may be tradable, but selling it early can produce a loss when interest rates or market conditions have changed.
Assets maturing within one to five working days could reduce issuers’ reliance on wholesale deposits while preserving access to cash. Issuers would still face redemption-timing, asset-concentration and credit-quality risks.
The recommendation concerns reserve composition. It does not remove MiCA’s broader obligations covering backing, safeguarding and redemption.
If euro stablecoins remain small, why is the ECB asking for a change now? Its published analysis estimated their combined market capitalization at approximately €450 million in January 2026, up from about €50 million at the beginning of 2024. Dollar-denominated stablecoins, by comparison, were worth roughly $300 billion.
The concern is therefore forward-looking. If a €50 billion token were classified as significant, the current rule would direct at least €30 billion into bank deposits.
Existing backstop: The ECB’s April analysis described draft safeguards intended to spread reserve deposits among banks and limit an individual bank’s exposure to one stablecoin. These controls reduce concentration, but they do not make the funding less likely to leave.
Nothing has changed in MiCA yet
The central banks submitted their position to the European Commission’s targeted review of MiCA. The consultation remains open until September 30.
The Commission will use the responses to assess how the regulation has worked and may later present a legislative proposal. The ECB cannot change MiCA through a consultation response, so the existing 30% and 60% thresholds remain in force.
The recommendation arrived one day after the ECB launched its Pontes settlement bridge. Pontes gives regulated tokenized wholesale markets access to central-bank money, while the MiCA review addresses the risks created when private digital money relies on commercial-bank balance sheets.
The Commission’s test is whether an alternative can preserve rapid redemptions without turning stablecoin reserves into flight-prone bank funding. Removing the deposit quota before that replacement is defined would exchange one liquidity problem for another.
This article is provided for informational purposes only and does not constitute financial, legal or investment advice. Stablecoin regulation and reserve requirements may change as the MiCA review continues.
Alex is Editor-in-Chief of Coindoo and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets – crypto first, then everything else.
It started in 2016 with Bitcoin. Like most people at the time, he didn’t fully understand it – so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can’t properly understand one without the other.
What drives him is straightforward: he wants to know why something is happening, not just that it’s happening. Most market coverage stops at the headline – price up, price down, here’s a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn?
He holds a degree in Tourism from New Bulgarian University – not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That’s probably why he hasn’t stopped.
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