EBA Rejects Commission Stablecoin Reserve Amendments Citing MiCA Liquidity Risk ∞ Regulation

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Briefing

The European Banking Authority (EBA) has published two formal Opinions opposing the European Commission’s (EC) proposed amendments to the draft Regulatory Technical Standards (RTS) for the Markets in Crypto-Assets Regulation (MiCA) stablecoin reserve requirements. This action signals a high-stakes institutional conflict over the prudential standards for Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs), arguing the EC’s changes would introduce material liquidity risk and enable regulatory arbitrage. The EBA explicitly asserts the EC’s proposed substantive amendments are “inconsistent with Articles 36(1)(b) and 38(1) under MiCA,” establishing a clear legal line in the sand.

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Context

The initial MiCA framework established a clear mandate for stablecoin issuers to maintain a reserve of assets with minimal market, credit, and concentration risk, mirroring the strict liquidity requirements of the traditional banking sector. Prior to the EBA’s Opinions, the prevailing challenge was the lack of final, granular Level 2 rules to operationalize this mandate, creating a compliance vacuum. The EC’s subsequent proposal to amend the EBA’s draft RTS introduced significant uncertainty by potentially broadening the scope of permissible reserve assets to include non-highly liquid financial instruments (non-HLFI), thus threatening to undermine the core stability principle.

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Analysis

The EBA’s formal opposition forces a critical re-evaluation of compliance frameworks for all prospective ART and EMT issuers. This dispute directly impacts the Capital and Liquidity Requirements module of a firm’s operational architecture. If the EC’s amendments were to prevail, issuers could structure their reserves with assets the EBA considers high-risk, potentially lowering immediate capital costs but significantly increasing systemic liquidity risk and the firm’s overall risk profile. Conversely, the EBA’s successful defense of its original RTS will mandate a stricter, more conservative asset composition, compelling firms to align their treasury management systems with the established banking liquidity framework to achieve MiCA compliance.

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Parameters

Regulatory Conflict Point ∞ EC’s proposed amendments to MiCA RTS on reserve asset composition and liquidity.
Key Legal Standard ∞ Articles 36(1)(b) and 38(1) of the MiCA Regulation.
Risk Cited by EBA ∞ Introduction of material liquidity risk and regulatory arbitrage.
Targeted Assets ∞ Asset-Referenced Tokens (ARTs) and E-Money Tokens (EMTs).

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Outlook

The immediate strategic outlook involves the European Commission’s response, which must now formally address the EBA’s Opinions before adopting the final RTS. This institutional friction could delay the finalization of the Level 2 rules, extending the period of compliance uncertainty for stablecoin issuers. The EBA’s firm stance sets a powerful precedent for prudential regulators globally, signaling that the core banking liquidity principles will be fiercely defended against political or commercial pressure, which will ultimately shape the long-term viability and stability of the EU stablecoin market.

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Verdict

The EBA’s authoritative rejection of the Commission’s amendments cements a stringent, banking-aligned prudential standard as the non-negotiable foundation for MiCA stablecoin issuance.

Stablecoin reserve requirements, MiCA prudential framework, Asset-referenced tokens, E-money tokens, Liquidity risk, Regulatory technical standards, EU banking framework, Regulatory arbitrage, European Banking Authority, Financial stability Signal Acquired from ∞ europa.eu