Tether Rejected MiCA Over 60% Bank Deposit Rule as ECB Now Seeks to Scrap It
Tether CEO Paolo Ardoino has renewed criticism of the European Union’s stablecoin rules after saying the company refused to pursue a MiCA license because of a requirement requiring significant stablecoin issuers to keep 60% of reserves in bank deposits. The comments come as the European Central Bank and national central banks are now calling for that requirement to be removed.
Tether’s Objection to the MiCA Reserve Requirement
Under the current Markets in Crypto-Assets Regulation, or MiCA, stablecoin issuers must hold at least 30% of reserves as deposits with credit institutions, with the threshold rising to 60% for significant tokens. The ECB had previously acknowledged that the requirement could create both liquidity benefits and new connections between stablecoins and the banking system.
Ardoino’s argument is that the rule made the European regulatory framework unsuitable for Tether’s reserve structure. Instead of placing a large portion of USD₮ reserves in commercial banks, Tether has emphasized highly liquid assets, particularly U.S. government securities and short-term liquidity instruments.
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Tether’s latest reported reserves illustrate that approach. Its second-quarter 2026 attestation showed approximately $184.6 billion in USD₮ issued, while the company reported $4.11 billion in excess reserves. Tether said the majority of its reserves remained concentrated in U.S. government-backed instruments and short-term liquidity facilities.
The ECB’s latest position creates an unusual regulatory twist. Rather than arguing that stablecoin issuers should simply hold more money at banks, the European System of Central Banks now says the fixed deposit requirement itself could create financial stability problems.
The central banks argue that stablecoin reserves held as commercial-bank deposits can behave differently from traditional retail deposits. If stablecoin demand suddenly falls and issuers face large redemptions, they could rapidly withdraw those funds, potentially creating additional liquidity pressure for banks.
ECB Wants Liquidity Instead of a Fixed Deposit Quota
The proposed alternative focuses on how quickly reserve assets can become available rather than requiring a specific percentage to sit in bank accounts. The ECB and national central banks want MiCA to use requirements based on assets that mature within one to five working days.
That approach would still require issuers to maintain readily accessible reserves, but it could give companies greater flexibility in determining where those reserves are held. It also reflects concerns that forcing large stablecoin issuers to maintain substantial commercial-bank deposits could create a new channel for financial contagion.
The ECB has previously highlighted the risks on both sides of the relationship. Stablecoin issuers can face problems when banks holding their reserves encounter difficulties, while a large stablecoin redemption could cause sudden withdrawals from banks. The March 2023 banking turmoil involving Silicon Valley Bank and USD Coin demonstrated how quickly concerns about reserve access can affect a stablecoin’s market value.
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The issue is particularly relevant because the stablecoin market has expanded far beyond its original role inside cryptocurrency trading. ECB President Christine Lagarde said in May that stablecoins had grown to more than $300 billion globally and that their increasing links with traditional finance were bringing financial-stability concerns into sharper focus.
For Tether, the debate also highlights the difference between regulatory compliance and reserve management. Tether has continued expanding outside the European regulatory framework while maintaining a reserve strategy built heavily around U.S. Treasury exposure. Its reported operating profit for the second quarter reached approximately $1.5 billion, largely driven by Treasury and repo holdings.
The ECB’s proposal does not mean that Tether has received a MiCA license or that the company is now preparing to seek one. It is also not a final change to European law. The central banks have submitted their position as part of the European Commission’s review of MiCA, meaning any amendment would still have to move through the EU legislative and regulatory process.
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The development nevertheless gives fresh context to Tether’s earlier objection. A requirement that Ardoino says was significant enough to prevent Tether from pursuing a European license is now being questioned by the institutions responsible for monetary and financial stability across the bloc.
For the broader stablecoin industry, the outcome could influence how issuers structure reserves while regulators attempt to balance redemption liquidity, banking-sector stability and consumer protection. The central question is shifting from how much stablecoin money should sit in banks to how quickly reserve assets can be accessed when users demand their money back.
MiCA’s review is therefore becoming an important test for Europe’s approach to stablecoin regulation. The ECB’s proposed change does not validate every criticism made by Tether, but it does show that concerns about the interaction between stablecoin reserves and commercial-bank funding are now being examined by European central banks themselves.
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