EU Central Banks Push to Eliminate Stablecoin Deposit Rule - PYMNTS.com

Central banks within the European Union are reportedly pushing to eliminate a rule that would require stablecoin issuers to hold a portion of their reserves as deposits with commercial banks. The debate centers on how stablecoin reserves should be structured under the bloc's evolving regulatory framework.

The discussion matters because reserve requirements directly affect how stablecoin issuers manage liquidity and where they park customer funds. If deposit mandates are removed, issuers could hold reserves in alternative instruments such as short-term government debt, which may change the yield profile and risk exposure of the tokens. For banks, losing a captive source of deposits could reduce funding advantages tied to stablecoin growth.

What to watch is how EU authorities balance financial stability concerns against competitiveness. Any final rule could influence where stablecoin firms choose to domicile and how similar requirements elsewhere are shaped.