Europe Central Banks Push for Tougher Stablecoin Rules in MiCA Review
Updated: 6 days ago
Europe’s central banking system has asked Brussels to tighten the bloc’s crypto rules, one day after the Eurosystem switched on Pontes, its settlement rail for tokenised securities.
The European System of Central Banks, which includes the European Central Bank and the national central banks of EU member states, published its response to the European Commission’s review of the Markets in Crypto-Assets Regulation, known as MiCA, on Tuesday 22 September. The 57-page response calls for stricter rules on stablecoins, clearer treatment of their reserves, and stronger EU-level oversight of crypto firms.
Central banks want the interest ban to cover more activity
MiCA already bans issuers of certain stablecoins from paying interest to holders. Stablecoins are crypto tokens designed to keep a steady value, often against a currency such as the euro or US dollar.
The central banks now want that ban to go further. Their response asks the European Commission to extend it to returns linked to lending and staking, where token holders may receive a payment for putting their tokens to work in crypto markets.
The concern is simple. If stablecoins start to look like interest-paying savings products, people may treat them more like bank deposits than payment tools. That could pull money away from regulated banks and make private digital tokens a larger part of day-to-day finance.
The request also shows how European central banks want stablecoins to behave. They may tolerate tokens used for payments or settlement, but they appear less willing to accept models that compete directly with bank accounts or money market products.
The reserve rule is also under pressure
The central banks also want a new approach to stablecoin reserves.
Under MiCA, issuers of some stablecoins must hold part of their reserves as deposits with credit institutions, in other words, banks. The Eurosystem response asks Brussels to scrap that bank deposit rule and rethink how backing assets are held.
This could become one of the most important changes in the review. Reserves are central to whether a stablecoin can keep its value during stress. If many users try to redeem tokens at the same time, the issuer must be able to meet those redemptions without delay.
Central banks have long been sensitive to where those reserves sit. Large deposits held by stablecoin issuers could affect banks, money markets, and the transmission of monetary policy. A rule that looks simple on paper may have wider effects once stablecoins reach scale.
Multi-issuer tokens face closer scrutiny
The Eurosystem response also calls for stronger supervision of crypto firms at EU level. That includes tighter limits on multi-issuer tokens, especially where some issuers are based outside the EU.
A multi-issuer model can involve more than one legal entity issuing or supporting tokens that appear to users as the same product. For supervisors, that can raise hard questions. Who is responsible if the token fails? Which authority has the final say? How can EU rules apply when part of the structure sits outside the bloc?
The central banks’ answer is to keep more control inside the EU. Their response points towards closer oversight of firms whose tokens may affect European payment systems, euro-denominated markets, or consumers in the bloc.
That position fits the wider direction of EU crypto policy. MiCA created a single framework for crypto assets across the Union. The new review is testing whether that framework is strong enough for larger and more complex token structures.
The timing matters for tokenised securities
The response landed just after the Eurosystem started Pontes, its settlement rail for tokenised securities. That timing gives the document extra weight.
Tokenised securities are traditional financial assets, such as bonds or shares, represented on digital systems. Settlement is the process that completes a trade, moving the asset to the buyer and the money to the seller.
Pontes shows that Europe’s central banks are not rejecting tokenisation as a technology. Instead, they are drawing a line between tokenised regulated assets and private money-like tokens that could grow outside the banking system.
That distinction matters for projects working on Tokenised equity EU markets. Builders may find official support for tokenised market plumbing, but they should expect stablecoins used in that plumbing to face strict rules, especially if they offer returns, rely on cross-border issuance, or depend on complex reserve structures.
What changes could come next
The European Commission’s MiCA review is the formal channel for assessing whether the rulebook needs changes. The Eurosystem response does not change the law by itself. It does set out what the European Central Bank and national central banks want lawmakers to consider.
The main proposals can be read in three parts:
Wider limits on returns
Stablecoin issuers and related firms would face tighter restrictions on interest-like rewards, including lending and staking returns.
A different model for reserves
Brussels would be asked to revisit the current rule requiring part of some stablecoin reserves to be held as bank deposits.
More central supervision
EU authorities would get a stronger role, with closer checks on crypto firms and multi-issuer stablecoin structures linked to non-EU entities.
For stablecoin issuers, the message is clear enough. The EU is not only asking whether tokens are properly backed. It is also asking whether their design could affect banks, payments, and monetary control.
For tokenised market projects, the signal is more balanced. Europe is building public settlement infrastructure for digital securities, while also seeking stricter limits on private tokens that might function as money.
A tougher phase for MiCA is taking shape
MiCA marked the EU’s first broad attempt to regulate crypto assets under one framework. The central banks’ response suggests the next phase may be stricter, especially for stablecoins that offer returns, use cross-border issuance, or hold large reserves in ways that could affect the banking system.
The Commission will decide how much of the Eurosystem’s advice to carry into future proposals. For now, the direction from Europe’s central banks is plain: tokenised markets may move forward, but private digital money will be expected to stay tightly within the public rulebook.
Background: what MiCA requires today
Under Article 54 of MiCA, stablecoin issuers must hold at least 30% of their reserve assets as deposits with credit institutions, rising to 60% for tokens classified as significant. That is the bank deposit rule the central banks want replaced. According to reporting on the 22 September submission, the ESCB proposes a liquidity-based test instead, with a minimum share of reserves held in assets that mature within one to five business days, such as overnight repos or very short-term government securities. It did not propose specific percentages.
The central banks are not alone. On 24 September 2026 the European Banking Authority set out its own priorities for the review. It described third-country multi-issuer schemes as posing significant to very significant risks and recommended that the minimum share of reserves held as deposits be reviewed. The EBA also noted that, as of 1 September 2026, 39 e-money tokens had been issued under MiCA and no asset-referenced tokens had been authorised.
What happens next
These responses feed into the European Commission's targeted consultation on the review of MiCA, which was due to close at the end of September 2026. The Commission has not given a date for any legislative proposal, so changes to reserve or interest rules are not imminent. Issuers operating today remain bound by the current text.
What it means for UK founders
The UK has taken a different line on reserves. On 22 June 2026 the Bank of England published its policy statement on systemic sterling stablecoins. It allows up to 70% of backing assets to be held in short-term UK government debt, with the remainder in central bank deposits. It dropped the individual holding limits it had consulted on and set a temporary issuance limit of £40 billion for each systemic stablecoin. The Bank intends to finalise its Code of Practice by the end of 2026.
For UK founders building products that touch both euro and sterling stablecoins, reserve rules and the treatment of rewards may diverge between the two regimes. Features that pass yield to holders through lending or staking are the area most exposed to change in the EU. Founders may want to take professional advice before designing reward features for EU users.
Key facts at a glance
30% and 60%: the MiCA minimum share of reserves held as bank deposits for standard and significant stablecoins.
21 September 2026: the ECB launches Pontes.
22 September 2026: the ESCB submits its response to the MiCA review.
24 September 2026: the EBA publishes its priorities for the review.
39: e-money tokens issued under MiCA by 1 September 2026, with no asset-referenced tokens authorised.
£40 billion: the initial issuance limit per systemic sterling stablecoin under Bank of England rules.
Sources
Frequently asked questions
What did the European System of Central Banks ask for in the MiCA review?
In a 57-page response to the European Commission's MiCA review, published on 22 September, the European System of Central Banks called for stricter rules on stablecoins, clearer treatment of their reserves and stronger EU-level oversight of crypto firms.
Do European central banks want to extend the MiCA stablecoin interest ban?
Yes. MiCA already bans issuers of certain stablecoins from paying interest, and the central banks want the ban extended to returns linked to lending and staking. Their concern is that interest-paying stablecoins could pull money away from regulated banks.
What change to stablecoin reserve rules does the Eurosystem propose?
Under MiCA, issuers of some stablecoins must hold part of their reserves as bank deposits. The Eurosystem response asks Brussels to scrap that bank deposit rule and rethink how backing assets are held.
What is the Eurosystem's Pontes?
Pontes is the Eurosystem's settlement rail for tokenised securities. It was switched on one day before the central banks published their MiCA review response.
Does the Eurosystem response change MiCA?
No. The response does not change the law by itself. It sets out what the European Central Bank and national central banks want lawmakers to consider, and the European Commission will decide how much of that advice to carry into future proposals.
This article is for general information only and is not legal or financial advice.
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