ECB Pushes to Delete MiCA Stablecoin Reserve Rule Tether Rejected
European central banks are urging the European Commission to scrap MiCA's requirement that stablecoin issuers hold up to 60% of reserves in commercial bank deposits. While central bankers want to protect traditional lenders from sudden deposit drains, the proposal directly resolves Tether's core objection to European regulation. If enacted, this rule change could clear the path for USDT to re-enter the European market under a compliant framework.
The European Central Bank and Tether rarely see eye to eye, but they just landed on the exact same conclusion: forcing stablecoin issuers to hoard cash in commercial banks is a structural defect. Under current MiCA rules, large issuers must hold 60% of reserve funds as bank deposits, a requirement that led Tether to abandon its pursuit of an EU license.
Central bankers fear that massive, unpredictable token redemptions could trigger instant liquidity drains across commercial banks. Tether CEO Paolo Ardoino argued the inverse—that placing billions in uninsured bank accounts exposes reserve backing to commercial banking stress. The shared criticism proves the mandate satisfies neither systemic risk control nor asset safety.
Instead of bank deposits, the ESCB wants reserves parked in ultra-short-term assets maturing within five days, like treasury bills. That exact structure matches Tether's preferred reserve mix, which heavily favors short-dated sovereign debt over commercial bank liabilities.
If European lawmakers adopt the revision during MiCA's current review, the highest regulatory barrier keeping Tether locked out of the European Economic Area disappears. A compliant path for USDT in Europe would dramatically improve liquidity for continental traders who were forced to migrate to alternative settlement tokens.