The ECB and all 27 EU central banks want to scrap MiCA's rule requiring major stablecoin issuers to hold 60% of reserves in bank deposits.
Their reasoning? Stablecoin flows are too volatile and could expose banks to sudden deposit withdrawals.
The central banks aren't worried about protecting stablecoin holders. They're worried about protecting banks FROM stablecoin holders.
The proposed fix: issuers hold reserves in "highly liquid assets" maturing in 1 to 5 days instead of parking them at banks.
Translation: stablecoins got big enough that their deposit requirements became a systemic risk to the very banking system they were forced to integrate with.
The regulated structure created the fragility. This is what happens when you try to shoehorn new money into old pipes.
Their reasoning? Stablecoin flows are too volatile and could expose banks to sudden deposit withdrawals.
The central banks aren't worried about protecting stablecoin holders. They're worried about protecting banks FROM stablecoin holders.
The proposed fix: issuers hold reserves in "highly liquid assets" maturing in 1 to 5 days instead of parking them at banks.
Translation: stablecoins got big enough that their deposit requirements became a systemic risk to the very banking system they were forced to integrate with.
The regulated structure created the fragility. This is what happens when you try to shoehorn new money into old pipes.
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