European central banks press for stricter liquidity treatment of stablecoin reserves

European central banks are asking EU policymakers to tighten the way stablecoin reserves are regulated, arguing that the bloc’s current bank-deposit requirements may create the wrong kind of risk when token holders rush to redeem. The request lands as Europe’s Markets in Crypto-Assets framework moves from rulemaking into market supervision, and it puts reserve liquidity — not just reserve composition — at the center of the next stablecoin policy fight.

The European System of Central Banks, which includes the European Central Bank and national central banks across the European Union, is responding to MiCA provisions that require issuers of e-money tokens and asset-referenced tokens to keep a share of their reserves as deposits with credit institutions. Public reporting on the paper says the existing thresholds are 30% for ordinary issuers and 60% for significant issuers. The central banks’ concern is that a hard deposit quota can concentrate redemption pressure inside commercial banks exactly when a large stablecoin is under stress.

Their alternative is a more direct liquidity regime. Rather than requiring a fixed percentage of reserves to sit in bank deposits, the central banks want issuers to meet liquidity thresholds calibrated to the speed and scale of possible redemptions. That would move the framework closer to a stress-testing model: issuers would need assets that can be converted into cash quickly enough to meet token-holder claims, while supervisors would have more room to assess the actual maturity, marketability and concentration of the reserve pool.

The proposal also reaches beyond reserve assets. European central bankers are seeking a broader treatment of stablecoin yield, including arrangements where yield is delivered indirectly through crypto lending, staking or affiliated programs instead of being paid by the issuer as explicit interest. The policy logic is straightforward: if a token marketed for payments starts to resemble an interest-bearing deposit substitute, regulators worry it could compete with bank deposits without being subject to the same prudential framework.

That distinction matters for stablecoin operators serving Europe. MiCA already gives the EU one of the clearest statutory regimes for fiat-referenced tokens, but clarity does not mean the framework is settled. If supervisors adopt a liquidity-threshold approach, issuers may need to demonstrate more detailed reserve analytics, intraday redemption planning and operational access to liquid assets. The change could favor firms with institutional-grade treasury operations, multiple banking partners and clean segregation between reserve management and yield products.

For market participants, the immediate impact is less about any single token and more about the direction of travel. Europe is signaling that stablecoins used for payments will be treated as narrow, redeemable money instruments rather than general-purpose yield platforms. That could support user trust by reducing ambiguity around redemption backing, but it may also limit the commercial models available to issuers and distribution partners that rely on incentives to grow balances.

The debate is especially relevant for dollar stablecoins and euro-denominated payment tokens trying to operate across European venues. Tokens such as USDC and USDT are already deeply embedded in global crypto settlement, while euro liquidity remains smaller and more policy-sensitive. A tougher liquidity standard could raise the bar for all issuers, but it could also make compliant tokens more credible for banks, brokers and payment firms that need clear reserve mechanics before integrating stablecoin rails.

The central banks’ message is that reserve safety cannot be reduced to a static percentage held at banks. In a stress event, the relevant question is whether an issuer can meet redemptions without transmitting instability to the banking system or forcing disorderly asset sales. If MiCA implementation moves in that direction, Europe’s stablecoin market will likely become more operationally demanding — and potentially more institutionally legible — before it becomes larger.