ECB Seeks Tighter MiCA Rules to Block Indirect Stablecoin Yields and Protect Bank Deposits
The central banks want reserve rules tied to liquidity instead of bank deposits, saying the current model could expose lenders to stablecoin run risk.
- On Tuesday, the European System of Central Banks proposed tightening EU crypto regulations by banning indirect stablecoin yield while replacing mandatory bank-deposit reserve floors with maturity-based liquidity requirements.
- Central banks argued that current rules forcing issuers to keep 30% to 60% of reserves as bank deposits create systemic risks, as large withdrawals during market stress could expose commercial lenders to sudden funding pressure.
- Regulators warned that stablecoins can be "transformed into yield-bearing arrangements through lending, staking or other layered structures," circumventing prohibitions on direct remuneration to token holders via ancillary or unregulated services.
- A token fully backed by central bank money "would effectively result in a 'synthetic' central bank digital currency" that could drain deposits from commercial banks, the ESCB warned in its response to the European Commission.
- The European Commission's consultation on the Markets in Crypto-Assets regulation closes September 30, with a potential revision report expected by mid-2027 that could introduce new legislative proposals addressing these financial stability concerns.
52 Articles
52 Articles
ECB wants stablecoin yield ban expanded across crypto lending and staking
The European Central Bank and national central banks across the European Union have called for MiCA’s stablecoin remuneration ban to cover lending, borrowing, staking and other arrangements that can generate indirect returns for token holders. According to the European System…
Stable coin issuers should not be required to maintain a minimum proportion of their reserve assets as bank deposits, because this could leave creditors exposed to a stable coin race and less stable deposits, said the European Central Bank (ECB) and other central banks of the European Union on Tuesday (22). The European System of Central Banks (ESCB), a body composed of the ECB and the 27 national central banks of the EU countries, made comments…
ECB calls for tougher EU crypto rules and curbs on dollar stablecoins
Europe's central banks want the EU's crypto rules tightened, calling for a wider ban on interest payments on stablecoins, new powers to curb tokens pegged to foreign currencies such as the US dollar, and EU-level supervision of crypto firms.
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