ECB backs easing MiCA bank-deposit rule; USDT still barred

The European System of Central Banks, which includes the ECB and the EU’s 27 national central banks, recommended removing MiCA’s fixed commercial bank deposit requirement in a response to a review of the Markets in Crypto‑Assets law. The group said the rule could create a new source of financial risk.

Under current MiCA rules, stablecoin issuers must hold at least 30% of reserves in commercial bank deposits, rising to 60% for tokens classified as “significant.” The ESCB proposed replacing the fixed-deposit requirement with rules that allow issuers to hold assets that can be converted into cash within one to five working days.

The ESCB warned that a rapid wave of redemptions would force issuers to withdraw large sums from banks at short notice, and banks might not be able to return funds immediately if deposits have been lent out. “Forcing issuers to hold large bank deposits could create another source of financial risk,” the central banks wrote.

Tether raised similar concerns in 2024. Paolo Ardoino, then chief technology officer and later CEO of Tether, argued the deposit rule could leave stablecoin issuers dependent on banks that might not have enough cash during a rush for withdrawals. He warned the requirement could expose issuers to bank liquidity constraints.

Tether’s USDT has not received formal MiCA authorization. As a result, several regulated European trading platforms have removed USDT from their listings. Market data shows USDT’s market value at about $183 billion, roughly 63% of the $292 billion stablecoin market.

The ESCB also flagged cross-border risks, noting that stablecoins issued across multiple jurisdictions but treated as interchangeable could allow redemptions originating outside the EU to drain reserves held within member states.

Any change to MiCA must pass through the EU’s rulemaking process and be agreed by lawmakers and national regulators before it becomes law. Removing the fixed deposit share would affect liquidity-management rules, but tokens still require formal authorization and other regulatory compliance to list on regulated EU platforms.