European Central Bank Proposes Replacing MiCA Stablecoin Bank-Deposit Rules With Liquidity Standards - NewsCord

The European Central Bank has proposed replacing the bank-deposit treatment of stablecoin reserves under the Markets in Crypto-Assets (MiCA) framework with dedicated liquidity standards, according to NewsCord. Under current MiCA rules, stablecoin issuers' reserves are largely handled in ways that mirror banking regulation, including deposit-like safeguards. The ECB's proposal would shift the emphasis toward liquidity requirements — rules focused on ensuring reserves can be converted into cash quickly enough to meet redemption demands.

The distinction matters because deposit rules and liquidity standards address different risks. Deposit-style regulation is designed around protecting funds held with banks, while liquidity standards target an issuer's ability to honor redemptions under stress. For stablecoin issuers, the change could alter how reserves must be structured and how much emphasis is placed on readily sellable assets versus other safeguarding measures.

What to watch: whether EU legislators take up the proposal, how it interacts with the existing MiCA text, and whether similar thinking spreads to other jurisdictions. Any shift in reserve rules can influence issuance costs and the attractiveness of euro-denominated stablecoins — though the proposal's practical effect depends entirely on the legislative process ahead.