EU Rules Make Euro Stablecoins Hold Bank Deposits

MiCA requires e-money token issuers to hold at least 30% of reserves as deposits at EU-licensed credit institutions. For tokens designated as significant the minimum is 60%. Article 38 sets the deposit floor and requires reserves to be held in highly liquid, low-risk assets. Article 36 requires monthly disclosure of reserve composition.

Issuers may place the remainder of reserves in other qualifying liquid assets. The deposit minimum is a regulatory floor rather than an optional preference.

U.S. practice and legislative proposals steer dollar stablecoin reserves into short-dated Treasury bills, repurchase agreements and government money market funds. Bank deposits are permitted under that model but not required.

Regulators cited monetary reasons for the deposit requirement: reserves held outside the EU would move euros out of the European banking system and could reduce the deposit base that funds local lending. The rule was not framed primarily as a consumer-protection measure.

In March 2023 about $3.3 billion of USDC’s reserves were stranded at a failed U.S. regional bank and the token briefly lost its peg. After that episode the issuer moved much of its cash leg into government money market funds and limited exposure to any single bank. Under MiCA, issuers could not move the mandated share of reserves out of EU bank deposits.

Deposits must be with EU-licensed institutions. The requirement spreads exposure across multiple banks rather than concentrating it in a single institution. EU banking supervision applies and national deposit guarantee schemes protect deposits up to €100,000 per depositor per institution.

Bank deposits expose reserves to counterparty and credit risk. Government debt and repo expose reserves to duration and liquidity risk. Both the EU and U.S. frameworks require full backing in liquid, low-risk assets.

A late‑August 2026 screen identified about €632 million of redeemable, active euro stablecoins, roughly 0.24% of global stablecoin capitalisation of about $304 billion. Two issuers accounted for about 85% of euro supply, with one holding roughly 62% and another about 23%.

Article 36 disclosures should state the share of reserves held in deposits, the number of institutions holding those deposits and whether a token is designated as significant, which raises the deposit floor to 60%. Those details determine how much a redemption claim rests on the European banking system rather than on short-term government paper.

Under MiCA, a legally required share of euro stablecoin reserves must remain as deposits at EU credit institutions. By contrast, dollar-stablecoin frameworks commonly concentrate reserves in short-dated government debt and related instruments.