Europe tied stablecoin issuers to banks for safety. Its central banks now call that the risk

On 22 September the European System of Central Banks published its answer to the European Commission's targeted consultation on MiCAR. Buried in a document about scope, definitions and token categories is a request that changes the shape of every euro stablecoin balance sheet: delete the rule that forces issuers to park a fixed share of their reserves in bank deposits.

Read the coverage and you will see this described as the ECB finally letting stablecoins hold short-term government bonds. That is not what happened, and the difference matters. MiCAR already permitted short-dated sovereign paper in a reserve. What it also did was set a floor underneath it - at least 30% of reserves in bank deposits, rising to 60% for tokens designated significant. Bonds were never banned. Banks were mandatory. The ESCB is asking to remove the mandate, not to grant a permission.

In its place it proposes liquidity buckets: minimum percentages of the reserve maturing within one working day and within five. The starting calibration it points to is the EBA's own draft technical standards - 40% at one day and 60% at five for significant tokens, 20% and 30% for the rest. Same objective, different instrument. An issuer would prove it can meet redemptions by holding assets that actually mature on time, rather than by holding a quota at a bank.

The anchor is the wire

The reasoning is the interesting part, because it is an argument against the ECB's own earlier instinct.

The deposit floor, the ESCB writes, "creates a direct link between issuers and credit institutions". A floor of that size means a large issuer is, structurally, a large depositor. If holders redeem in a hurry, the issuer does not sell a bond into a deep market - it pulls cash out of a bank, at speed, in size, on the worst possible day. The document is blunt that where such deposits form a meaningful part of a bank's funding, that withdrawal becomes the bank's liquidity problem. And it notes the channel runs both ways.

So the rule written to make stablecoins safer by anchoring them to regulated banks turns out to be the cable along which a stablecoin run reaches the regulated banks. The safety feature and the contagion path are the same object.

There is a second reason, stated with less ceremony. The deposit requirement, the ESCB observes, reduces issuers' profitability given the limited yield on sight deposits - and it ties adequate profitability to the emergence of a competitive euro-denominated stablecoin market. That is a central bank saying out loud that its own reserve rule has been a tax on euro tokens, and that the thinness of the euro stablecoin market is partly a policy outcome rather than a market verdict.

What this looks like from the ramp

For anyone whose job is moving value between chains and bank accounts, none of this is abstract, because the deposit floor was never only an issuer problem.

Consider the position it created. An issuer must place between 30% and 60% of its reserve with a credit institution. The credit institution looks at what has arrived: a single concentrated deposit, operationally flighty, from a crypto-linked counterparty, on a balance sheet that is examined for exactly that. A great many banks priced that, and a great many simply declined it. The rule that bound issuers to banks handed banks the strongest possible reason to keep them at arm's length - and the same reflex, once engaged, rarely stops at the issuer. It runs down the chain to the businesses settling through them.

This is the pattern worth naming, because it is not specific to MiCAR. The instrument was never the fragile part. Tokens settle, ledgers reconcile, redemption logic executes. What creaks is the boundary where that value has to become a euro in an account at a supervised institution - and the rules written at that boundary tend to be the thing that decides whether a corridor works, long before anything technical does. A reserve rule drafted as prudential protection became, in practice, a distribution constraint on the entire euro corridor.

Removing the floor does not remove the bank. Issuers will still need accounts, settlement and a redemption path, and liquidity buckets bring their own supervisory weight. What changes is the character of the relationship: banking becomes something an issuer arranges on commercial terms rather than a quota it must fill regardless of price or appetite.

What has not happened

Nothing is in force. This is a consultation response - an input, from an influential participant, into a review the Commission must report on under Articles 140 and 142 of MiCAR. Any actual change requires a Commission proposal and then the ordinary legislative route through Parliament and Council, which is measured in years rather than quarters. The ESCB itself hedges every item as subject to further assessment and calibration.

Two things are worth watching from here. First, whether the Commission's report carries the deposit floor forward as a live question or lets it sit. Second, the EBA draft standards the ESCB wants adopted swiftly - those numbers set the floor under the new regime, and they are being argued over now, while almost nobody is looking.

The document is public and readable. It is more candid than most things that will be written about it.

Source: ESCB (European System of Central Banks), 2026-09-22. (source)

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