EU central banks propose removing bank-deposit rule

The European System of Central Banks — the European Central Bank and national central banks — recommended in late September 2026 that the Markets in Crypto‑Assets regulation be amended to replace a compulsory share of reserves held in commercial‑bank deposits with minimum holdings of assets that mature within one and five working days.

Under current MiCA rules, stablecoins issued by electronic‑money institutions must hold at least 30% of reserves in commercial‑bank deposits, rising to 60% for tokens designated significant. The proposal would set statutory floors for very short‑maturity assets instead of mandating a deposit share.

Central banks cited a two‑way risk from bank deposits. Reserves placed with banks become funding for those banks. If many token holders redeem at once, issuers may withdraw large deposits, forcing banks to replace funding during stress. A bank failure can also reduce confidence in reserves held at that institution.

Regulators noted practical trade‑offs. Excluding bank deposits can push issuers to sell or finance securities to meet redemptions. Short‑dated government debt can decline in value or be hard to convert into cash in stressed markets.

The Bank of England’s framework for systemic sterling stablecoins excludes commercial‑bank deposits from backing. Its steady‑state model allows up to 70% of reserves in short‑term UK government debt with up to six months to maturity and up to 30% in central‑bank deposits that pay no interest. Issuers designated systemic at launch may initially hold up to 95% in government debt while they scale. The Bank reached the consultation deadline for its draft code on September 22, 2026 and plans to finalize the code by the end of 2026.

Changing MiCA’s deposit floors requires an amendment through the EU legislative process. The current commercial‑bank deposit requirements remain in force until lawmakers approve revisions.

An ECB analysis found that significant stablecoins issued by electronic‑money institutions could meet redemptions equal to about 60% of supply by drawing down deposits without immediately selling sovereign bonds. That capacity depends on deposits being available when needed.

Market participants will operate under the existing MiCA floors until any legislative change. Regulators in the EU and the UK are advancing rules that prioritize liquidity and seek to limit transmission of stress between stablecoins and banks.