ESCB Opposes Mandatory Bank Deposit Reserves for Stablecoin Issuers

The European System of Central Banks (ESCB), comprising the European Central Bank (ECB) and national central banks, has formally opposed the requirement for stablecoin issuers to hold at least 60% of reserves in bank deposits. The ESCB argues that this policy exposes banks to market volatility and threatens deposit stability, suggesting instead that reserves be held in short-term assets maturing within one to five business days. Additionally, the ESCB highlighted significant challenges in enforcing MiCA regulations against non-compliant crypto firms targeting EU users.