ECB and EU Central Banks Oppose Stablecoin Reserve Rule Under MiCA Regulations
Central Banks Critique on Stablecoin Reserve Requirements
PARIS, Sept 22 (Reuters) - Stablecoin issuers should not be required to hold a minimum proportion of their reserve assets as bank deposits because they could leave lenders exposed to changes in the stablecoin market and less sticky deposits, the ECB and other EU central banks said on Tuesday.
ESCB’s Response to MiCA Consultation
The European System of Central Banks (ESCB) - a body made up of the ECB and the 27 national central banks of EU countries - made the comments in a response to a consultation on the MiCA regulations, a set of EU-wide crypto rules which came into force last year.
Recommended Changes to Reserve Asset Requirements
Instead of the current requirement for major stablecoin issuers to hold 60% of their reserves as bank deposits, the central banks recommended changing MiCA to instead require a minimum percentage of the token reserves which should be held in assets which mature within one and five working days.
Regulatory Enforcement and Investor Protection Concerns
The central banks also said that European regulators are facing "material challenges" in enforcing the bloc's crypto regulations, as non-compliant crypto companies continue to have access to EU customers, creating investor protection concerns.
(Reporting by Elizabeth Howcroft in Paris; Editing by Tommy Reggiori Wilkes)
