ECB and EU Central Banks Urge Replacing MiCA Stablecoin Deposit Rule With Liquidity Thresholds

On September 22, 2026, the European System of Central Banks published a formal response to the European Commission's review of the Markets in Crypto Assets Regulation, known as MiCA. The ESCB is made up of the European Central Bank and the 27 national central banks of European Union countries. In its response, the ESCB recommended removing MiCA's requirement that stablecoin issuers hold at least 30% of their reserves as bank deposits, a figure that rises to 60% for significant stablecoins. Instead, the central banks backed liquidity thresholds for reserve assets that mature within one and five working days.

MiCA is a set of EU wide crypto rules that came into force last year, creating a harmonized regulatory framework for crypto assets across the bloc. The rules cover asset referenced tokens and e money tokens, commonly known as stablecoins. Under the current framework, stablecoin issuers must keep a minimum share of their reserves in bank deposits. The ESCB argues that this design creates a direct link between issuers and credit institutions, potentially exposing banks to liquidity problems if a stablecoin run forces an issuer to withdraw deposits rapidly.

The consultation response, published on Tuesday, September 22, 2026, is part of the Commission's review of MiCA. The European Banking Authority, or EBA, had already published draft rules in 2024 setting out liquidity standards for stablecoin reserves. Those draft standards require significant stablecoins to hold at least 40% of reserves in assets maturing within one working day and 60% within five working days. For non significant tokens, the thresholds are 20% and 30%. The ESCB pointed to these numbers as a possible model, arguing that fixed deposit percentages should be replaced by convertibility based thresholds.

The central banks also named specific instruments that could satisfy the proposed liquidity requirements, including overnight reverse repurchase agreements, often called repos, and short term sovereign bonds. In addition, the ESCB warned that European regulators face what it described as material challenges in enforcing MiCA, noting that non compliant crypto companies can still reach EU customers despite the bloc's licensing regime. That enforcement gap raises investor protection concerns and adds urgency to the debate over stablecoin reserves.

Key Facts

Reuters reported on September 22, 2026 that the ESCB said stablecoin issuers should not be required to hold a minimum proportion of their reserve assets as bank deposits because they could leave lenders exposed to changes in the stablecoin market and less sticky deposits. The central banks argued that the existing requirement creates a direct link between issuers and credit institutions. If a stablecoin run forces an issuer to rapidly withdraw deposits, banks could face sudden outflows and liquidity pressure.

The current MiCA rule requires at least 30% of reserves to be held as bank deposits. For significant stablecoins, the threshold is 60%. Cointelegraph reported on September 22, 2026 that the ESCB called for removing those rules and replacing them with minimum liquidity thresholds for reserve assets maturing within one and five working days. The same report noted that the ESCB backed overnight reverse repurchase agreements and short term sovereign bonds as alternative instruments issuers could use to achieve the required liquidity.

GNcrypto reported on September 22, 2026 that the ESCB referenced draft standards from the European Banking Authority published in 2024. Under those draft standards, significant stablecoins would hold at least 40% of reserves in assets maturing within one working day and 60% within five working days. Non significant tokens would face thresholds of 20% and 30%. The ESCB's response suggests that these liquidity based measures could replace fixed deposit shares entirely.

Reuters reported on September 22, 2026 that the central banks also said European regulators are facing material challenges in enforcing the bloc's crypto regulations. Non compliant crypto companies continue to have access to EU customers, which creates investor protection concerns. The ESCB called for stronger supervision and improved cross border enforcement as part of its response to the Commission's MiCA review.

The ESCB's membership includes the ECB and the 27 national central banks of EU countries. Its response was published on Tuesday, September 22, 2026. The proposal focuses on assets that can be converted to cash within one working day and within five working days, a shift from fixed deposit quotas toward liquidity based requirements. The EBA's 2024 draft standards provide the numerical reference points for the debate.

Analysis

What this really means is that the ECB and national central banks are trying to separate two risks that MiCA currently bundles together: the risk that a stablecoin cannot be redeemed, and the risk that a bank cannot meet withdrawals. By requiring a fixed share of reserves in bank deposits, MiCA ties stablecoin issuers to the balance sheets of commercial banks. The ESCB wants to break that link. Its preferred approach would judge reserves by how quickly they can be turned into cash, not by where they are held. For significant stablecoins, the EBA's 2024 draft standards suggest 40% of reserves in assets maturing within one working day and 60% within five working days. For non significant tokens, the figures are 20% and 30%. Those thresholds would push issuers toward highly liquid instruments such as overnight repos and short term sovereign bonds, rather than large bank deposits.

The bigger picture here is a regulatory pivot from deposit based backing to liquidity based backing. That pivot has consequences for banks and for stablecoin issuers. Banks have benefited from stablecoin reserves because they provide a source of deposits. But the ESCB warns that those deposits may not be sticky. If a stablecoin experiences a run, the issuer may withdraw deposits quickly, leaving the bank with a funding gap. The central banks therefore see the current rule as a channel for transmitting crypto market stress into the banking system. Replacing deposit quotas with liquidity thresholds would not eliminate run risk, but it would reduce the direct exposure of banks to stablecoin dynamics.

The analysis also has to account for enforcement. The ESCB's own response admits that regulators face material challenges in enforcing MiCA. Non compliant crypto companies can still access EU customers, which undermines the level playing field that MiCA was meant to create. A liquidity rule is only as good as its supervision. If unlicensed firms can offer stablecoin like services without following reserve requirements, then even a well designed liquidity framework may not protect investors. The ESCB's call for stronger cross border enforcement is therefore not a side note. It is central to whether the new approach can work.

Why It Matters

This matters because MiCA is the European Union's flagship crypto regulation, and stablecoins are among the most widely used crypto products. A change to reserve rules would affect every issuer that wants to serve EU customers. The current 30% and 60% deposit requirements are clear and easy to enforce, but they also create a mechanical link between stablecoin reserves and bank deposits. If the ESCB's recommendation is adopted, issuers would need to restructure their reserve portfolios around one day and five day liquidity buckets. That could change the economics of issuing stablecoins, the demand for short term government bonds, and the role of overnight repo markets.

It also matters for financial stability. The central banks are worried about a scenario in which a stablecoin run forces an issuer to withdraw bank deposits rapidly, causing liquidity stress at the bank. By shifting to liquidity thresholds, they aim to make reserves more self contained and less dependent on the banking system. At the same time, the ESCB acknowledges that enforcement is difficult. Non compliant firms can still reach EU customers, so the intended protections may be unevenly applied. For investors, the key question is whether the new rules would make stablecoin redemption more reliable, not just differently regulated.

Finally, the timing matters. The response was published on September 22, 2026, during the Commission's review of MiCA. The EBA's 2024 draft standards provide a detailed reference for what liquidity thresholds could look like. The ESCB's intervention puts the central banks firmly on record in favor of replacing deposit quotas with liquidity requirements. That position will shape the next phase of the MiCA review and the broader debate over how to regulate stablecoins in the EU.

Next Up

The European Commission will now consider the ESCB's response as part of its review of MiCA. Any change to the bank deposit requirement would need to go through the EU's legislative process, and the EBA's 2024 draft standards could serve as a starting point for new liquidity thresholds. The central banks have also called for stronger supervision and improved cross border enforcement to address the material challenges they identified. Market participants will watch whether the Commission proposes removing the 30% and 60% deposit rules in favor of one day and five day liquidity requirements.

In the meantime, stablecoin issuers and banks will assess how a shift from deposit based reserves to liquidity based reserves would affect their operations. The debate is likely to focus on the precise calibration of the thresholds, the treatment of significant versus non significant tokens, and the instruments that count toward the liquidity buffers. The ESCB's response has set the terms for that discussion, but the final outcome depends on the Commission and the EU co legislators.