USD
ECB Pushes MiCA Changes on Stablecoin Yields and Reserve Liquidity
Central banks target indirect returns while shifting reserve rules toward faster access to cash
TL;DR
- European central banks want MiCA’s stablecoin remuneration ban expanded to lending, borrowing, staking and other indirect yield structures.
- They also want mandatory bank-deposit reserve requirements replaced by liquidity rules based on how quickly assets can be converted into cash.
- The proposal reflects concerns that large stablecoin deposits could become an unstable source of bank funding during redemptions.
Trade smarter on Jupiter, Solana’s leading DEX built for fast execution and deep liquidity.
Swap tokens at competitive rates, route across multiple liquidity sources automatically, and access perpetuals, DCA, and advanced trading tools — all in one place!
The European Central Bank and European Union national central banks are pushing changes to the Markets in Crypto-Assets regulation that would tighten restrictions on indirect stablecoin yields while replacing mandatory bank-deposit reserve rules with liquidity-based requirements. The European System of Central Banks published the proposals on Sept. 22, 2026, as part of its response to the European Commission’s MiCA review.
The ESCB wants crypto platforms prevented from using lending, borrowing, staking and similar products to generate returns on stablecoin holdings. “Electronic money is intended to be used for making payments and not as a means of saving,” the ESCB said in its response to the European Commission consultation.
The group’s 57-page response said it “continues to support the prohibition on CASPs paying remuneration on stablecoins,” referring to crypto-asset service providers. The ESCB argued that the restriction should extend beyond services already covered by MiCA, which began taking effect in June 2024, to unregulated activities that can generate indirect returns.
Central banks said those structures could weaken the distinction between electronic money and commercial bank deposits and distort competition across the EU financial system. “Maintaining and, where necessary, strengthening the prohibition, covering both direct and indirect forms of remuneration, should be a clear legislative priority,” the ESCB stated.
The ECB said stablecoins can be “transformed into yield-bearing arrangements through lending, staking or other layered structures,” allowing platforms to potentially circumvent the prohibition on direct remuneration. The ESCB wants EU legislation to prevent those structures from becoming an alternative route to stablecoin yield.
ECB Wants Liquidity Rules to Replace Bank-Deposit Mandates
The central banks also want MiCA’s mandatory bank-deposit requirements for stablecoin reserves removed. The ESCB said the existing requirement “creates a direct link between issuers and credit institutions” and could expose banks to liquidity pressure if a stablecoin run forces an issuer to quickly withdraw deposits.
The proposed approach would focus instead on how rapidly reserve assets mature and can be converted into cash. The ESCB cited draft European Banking Authority standards as a starting point and separately pointed to overnight reverse repurchase agreements and short-term sovereign bonds as instruments issuers could use to meet liquidity needs.
The ESCB said large stablecoin deposits can become an unstable source of bank funding because an issuer may need to withdraw substantial funds quickly to meet redemptions. The proposal would therefore shift the regulatory emphasis from where reserve assets are held to how quickly they are available.
Beyond reserve requirements, the ESCB warned of “material challenges” in enforcing MiCA because non-compliant crypto companies can still reach customers in the European Union.
Tether Had Raised Similar Bank Liquidity Concerns
Tether CEO Paolo Ardoino had raised a similar concern in an October 2024 Cointelegraph interview. Ardoino used a hypothetical stablecoin with 10 billion euros in reserves, including 6 billion euros that would have to remain in bank deposits under the applicable requirement.
Ardoino said that if a bank lent out 90% of those deposited funds, just 600 million euros would remain immediately available. He argued that the structure could create a liquidity crunch if the stablecoin issuer suddenly needed billions of euros to process redemptions.
The ESCB also cited risk flowing in the opposite direction. It pointed to the March 2023 collapse of Silicon Valley Bank, which triggered a run on Circle’s USDC after Circle disclosed that $3.3 billion of its reserves were held at the bank.
Following the ECB proposal, Ardoino wrote on X: “Europe’s central banks want Brussels to delete a MiCA rule on stablecoin reserves. It forces large issuers to keep 60% of that money in commercial banks. Tether refused an EU license over the same clause.”
Stablecoin Rewards Debate Has Also Reached U.S. Banks
The European central banks’ position on indirect stablecoin returns mirrors a dispute over rewards in the U.S. Clarity Act debate. Eight U.S. banking groups urged senators to tighten restrictions on stablecoin rewards, arguing that crypto platforms could otherwise provide interest-like returns that compete with bank deposits.
The Clarity Act later failed a 49-50 procedural vote, with ethics provisions also playing an important role in the vote. The ESCB’s proposal addresses the European framework separately by seeking to cover direct remuneration as well as lending, staking and other structures that can produce returns on stablecoins.
This article has been refined and enhanced by ChatGPT.
