ECB and central banks want to eliminate mandatory stablecoin reserve storage

The European Central Bank (ECB) and national central banks from the EU want to scrap a rule from the European crypto regulation MiCA. This rule requires issuers to store at least 30 percent of their stablecoin reserves with commercial banks, and for significant stablecoins, even 60 percent applies. Central banks fear that this obligation could transfer problems from the crypto market to regular banks. When confidence in a stablecoin wanes, many holders may simultaneously request their money back, which could lead to sudden withdrawals at banks and pressure on their financing. The European Commission is currently assessing the functioning of MiCA, but until adjustments are made, the percentages of 30 and 60 percent remain in effect. Eliminating the minimum requirement would not mean that stablecoins could be issued without backing; the discussion focuses on which safe assets may serve as reserves.

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