The European Central Bank Opposes Major Stablecoin Issuers Holding 60% of Reserves as Bank Deposits

Odaily: In their feedback on the crypto asset regulatory framework MiCA, the European Central Bank and EU national central banks stated that requiring major stablecoin issuers to hold at least 60% of their reserve assets in the form of bank deposits could expose banks to stablecoin market volatility and undermine deposit stability.

The central bank system recommends mandating that a certain proportion of reserve assets must be held in short-term assets maturing within 1 and 5 business days. It also noted that despite MiCA being in effect, non-compliant crypto companies can still reach EU customers, posing significant challenges to regulatory enforcement and creating risks to investor protection.