Europe’s central banks want to scrap this stablecoin reserve safeguard - CryptoSlate

The European Central Bank, together with national central banks across the euro area, is reportedly pushing to remove a safeguard currently applied to stablecoin reserves under the EU's Markets in Crypto-Assets (MiCA) framework. The provision in question concerns the treatment of reserve assets backing stablecoins — the pool of cash and short-term instruments that issuers must hold to match outstanding token liabilities.

The debate matters because reserve rules are the backbone of stablecoin credibility. If the safeguard is scrapped, the composition and custody requirements for those reserves could become less prescriptive, potentially giving issuers more flexibility but also raising questions about how much protection token holders retain. Central banks typically favour strict, low-risk reserve standards, so their stance reflects a preference for tighter control over systemic risk rather than looser oversight.

For market participants, the key thing to watch is how EU legislators respond and whether any change alters the competitive position of euro-denominated stablecoins. Any shift in MiCA's reserve regime could influence where issuers choose to domicile and how investors assess the safety of tokens governed by European rules.