European System of Central Banks Seeks Minimum Liquidity Thresholds for Stablecoin Reserves

The European System of Central Banks (ESCB) is proposing revisions to MiCA stablecoin reserve rules, arguing that current requirements create liquidity risks for commercial banks. The ESCB suggests replacing fixed deposit requirements with liquidity thresholds based on asset maturity, such as overnight reverse repos and short-term government bonds. This proposal follows concerns that large-scale redemptions could force issuers to rapidly withdraw funds from partner banks, potentially destabilizing the banking system.