EU Central Banks Push to Scrap MiCA Stablecoin Deposit Floor, Cite Two-Way Run Risk

What the ESCB Wants Changed

Under MiCA's current technical standards, issuers of non-significant asset-referenced tokens must hold at least 30% of official-currency reserves as deposits at EU credit institutions. That floor climbs to 60% for significant tokens. The European System of Central Banks has told the European Commission to drop the fixed minimum entirely, according to reporting by Reuters and Cinco Días on Sept. 22.

Deposits would remain eligible. Instead of mandating where a set share of reserves must sit, the ESCB proposal tests how quickly the entire reserve can convert to cash. The consultation closes Sept. 30, and the Commission says responses may shape a future legislative proposal.

The Two-Way Channel Problem

A bank deposit gives an issuer redemption-ready cash. But it also makes the token's reserve quality partly dependent on the health of the bank holding it. The March 2023 crisis made that concrete: Circle held part of USDC's reserves at Silicon Valley Bank, and uncertainty over access pressured the peg. USDC's market capitalization dropped 26% over a month, per an ECB analysis.

The reverse channel matters too. An ECB speech described how heavy redemptions could force an issuer to pull large deposits at once, draining a bank's funding. An ECB working paper flagged that issuers tend to concentrate deposits among a small number of institutions, amplifying the effect.

Reported ESCB Liquidity Framework

The alternative relies on existing EBA liquidity buckets rather than a deposit quota:

• Non-significant tokens: at least 20% of reserves available within one working day, 30% within five days
• Significant tokens: 40% within one working day, 60% within five days

Withdrawable cash, reverse repos terminable within the relevant window, and specified highly liquid financial instruments can count toward the thresholds. The EBA uses Liquidity Coverage Ratio categories to determine eligibility. Core Level 1 sovereign and public-sector assets sit in a 0% reference-haircut bucket; extremely high-quality covered bonds carry at least a 7% reference haircut. For reserve valuation, those haircuts are disapplied and replaced with an overcollateralization requirement covering market-value risk.

Concentration Caps and Market Shift

Draft safeguards would cap a single issuer's deposit at one systemically important bank at 25% of reserves and 1.5% of that bank's total assets. Qualifying securities and money-market instruments from one issuer in the 0% haircut category are capped at 35% of reserves.

The shift could improve issuer economics. Short-term sovereign paper or overnight reverse repos may yield more than bank deposits, moving some reserve income and risk toward government-debt and funding markets. An issuer holding short-term sovereign debt has less direct exposure to a single bank's failure, and a redemption wave would be less likely to start with one large wholesale deposit withdrawal.

Trade-offs remain. Heavy redemptions can force securities sales or repo unwinds, and concentrated holdings could transmit stablecoin stress into sovereign or funding markets. Falling bond prices can weaken reserve values in the opposite direction.

Euro-denominated stablecoins held roughly €450 million in market capitalization as of January 2026, compared with about $300 billion for dollar-denominated tokens. Crypto-platform and stablecoin deposits remain small relative to exposed euro-area bank assets. The policy concern is forward-looking: what happens to concentration and reserve behavior if adoption scales.

Source: CryptoSlate