ECB proposes revising MiCA stablecoin reserve rules to mitigate bank run risks

The European Central Bank (ECB) and the European System of Central Banks (ESCB) have proposed amendments to the Markets in Crypto-Assets (MiCA) regulation regarding stablecoin reserves. The proposal suggests removing the mandatory 30% to 60% bank deposit requirement for issuers, replacing it with liquidity requirements based on maturity and asset convertibility. The ESCB argues that stablecoin deposits in banks create systemic risks, as they are highly sensitive to market stress and can trigger bank runs. The proposal aims to reduce the reliance on bank deposits, which also currently suffer from low yields, potentially improving the competitiveness of euro-denominated stablecoins.