The ESCB wants MiCA’s fixed bank-deposit floors for stablecoin reserves replaced with liquidity requirements based on assets maturing within one and five working days. Seven Republican senato
Stablecoin regulation is increasingly becoming a debate about bank balance sheets rather than simply crypto markets.
In Europe, the European System of Central Banks wants to remove MiCA rules that force stablecoin issuers to keep minimum portions of their reserves in commercial-bank deposits.
The concern is that large issuer balances can become a volatile source of bank funding if redemptions suddenly accelerate.
Across the Atlantic, a bipartisan group of U.S. senators proposed tightening the rules around stablecoin rewards just before the CLARITY Act procedural vote. The concern there runs in the other direction: attractive stablecoin rewards could increase competition for deposits traditionally held by banks. Banking-sector concerns over deposit competition were among the issues surrounding the bill before its September 15 vote.
Together, the two developments expose a growing regulatory fault line over where stablecoin liquidity should sit and how quickly it can move.
MiCA currently requires issuers of asset-referenced tokens and e-money tokens to keep minimum portions of reserve assets as deposits with credit institutions. For significant tokens, that requirement can reach 60%.
The ESCB now wants the minimum deposit requirement removed altogether.
In its September response to the European Commission’s MiCA review, the central-bank system argues that fixed deposit floors should be replaced with liquidity buckets, specifying minimum percentages of reserve assets that mature within one and five working days.
The proposal changes what regulators would measure. Instead of requiring a predetermined share of reserves to remain inside commercial banks, the emphasis moves toward whether issuers can turn reserve assets into cash quickly enough to meet redemptions.
The financial-stability argument rests on the nature of stablecoin issuer deposits.
Large balances from an issuer may provide funding to a bank during normal conditions, but they can also be withdrawn rapidly when token holders redeem. The ESCB warns that mandatory deposit requirements can therefore strengthen the link between stablecoin stress and bank liquidity. Its proposal is designed to reduce that concentration while keeping reserves available on short notice.
This is not a proposal to loosen stablecoin reserve standards. It changes the regulatory question from where the money must be held to how quickly it must become available.
The U.S. debate is focused on another part of the stablecoin-bank relationship.
Republican Senator Jerry Moran of Kansas submitted Senate Amendment 6771 on September 15 as a proposed amendment to H.R. 3633, the Digital Asset Market Clarity Act.
The Congressional Record lists ten original cosponsors alongside Moran. Six were Republicans: Susan Collins, Cindy Hyde-Smith, John Curtis, John Cornyn, Lisa Murkowski and Josh Hawley. With Moran included, seven Republican senators backed the proposal, alongside four other senators.
The amendment targeted the legal test used for stablecoin rewards.
It proposed replacing language covering rewards “economically or functionally equivalent” to interest or yield on an interest-bearing bank deposit with a test covering payments made in a manner “substantially similar” to how depository institutions pay interest or yield. It would also remove the word “solely” from another provision and strike an exception in the underlying text.
The wording matters because it changes the boundary Congress was considering between permitted stablecoin incentives and rewards that begin to resemble traditional deposit interest.
The amendment itself was ordered to lie on the table, meaning it was submitted but not adopted into law.
Hours later, the broader CLARITY Act failed to advance. The Senate voted 50-49 in favor of proceeding, short of the 60 votes required. Moran, Collins and Hawley were among the Republicans voting against advancement, while Thom Tillis switched his vote to no for procedural reasons that preserved the possibility of reconsideration.
The regulatory approaches become clearer when reduced to the balance-sheet mechanics behind them.
Stablecoin regulation Same bank-funding risk. Opposite direction. EU MiCA / ESCB Money flow at risk Stablecoin issuer → Bank → withdrawal Concern Large issuer deposits can leave banks quickly during redemptions. Proposed fix Replace fixed deposit floors with 1- and 5-day liquidity buckets. U.S. CLARITY Money flow at risk Bank → Stablecoin → deposit flight Concern Stablecoin rewards can compete with banks for customer deposits. Proposed fix Broaden the test for rewards that resemble bank interest or yield. Bottom line Europe is questioning how much stablecoin reserve money should sit inside banks. The U.S. debate is focused on how easily bank deposits could move into stablecoins.Europe’s concern begins after stablecoin reserves enter a bank. If issuers become major depositors, large redemptions can force those balances back out quickly.
The U.S. dispute begins earlier, with the decision over where customers keep their money.
Banking groups have argued that stablecoin rewards can compete with deposits and potentially reduce funding available for lending. The revised CLARITY text released before the vote was partly intended to address banking-industry concerns, although opposition remained.
The distinction helps explain why policies that initially appear contradictory can emerge from similar concerns about financial stability.
Neither proposal is currently law. The ESCB recommendations form part of the European Commission’s MiCA review, while Moran’s amendment was submitted but not adopted and the CLARITY Act failed to clear its September 15 procedural hurdle.
Their significance lies in what regulators and lawmakers are beginning to measure.
Stablecoin policy is moving beyond questions about token issuance, custody and trading venues toward the interaction between digital money and conventional bank funding.
Reserve rules determine how much issuer money enters banks. Reward rules can influence whether customer money leaves them.
As stablecoin markets expand, those two flows may increasingly become part of the same financial-stability calculation.
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