Circle Wants EU’s 30% Stablecoin Reserve Rule Swapped for Liquidity Test - The Cryptonomist

Circle has asked European Union policymakers to reconsider a rule requiring stablecoin issuers to hold at least 30% of reserves in bank deposits, according to The Cryptonomist. The company instead proposes a liquidity-based test, arguing that reserves should be judged by how quickly they can be converted into cash rather than by a fixed share held at banks.

The distinction matters because reserve rules shape both safety and cost for issuers. A rigid deposit threshold could push issuers toward concentrated banking exposure, while a liquidity standard would focus on the redeemability of assets such as short-term government debt. For a stablecoin, the core promise is that holders can redeem tokens at par, so the quality and marketability of reserves are central to that pledge.

What to watch: whether EU authorities treat the proposal as a viable alternative under the Markets in Crypto-Assets framework, and how other large issuers respond. Any change could influence where stablecoin reserves are held, how much issuers earn on them, and the competitive balance between bank deposits and government securities in the sector.