European Banking Authority Rejects Commission Amendments Weakening MiCA Stablecoin Reserve Standards ∞ Regulation

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Briefing

The European Banking Authority (EBA) formally rejected the European Commission’s (EC) proposed amendments to the draft Regulatory Technical Standards (RTS) governing the reserve assets for Asset-Referenced Tokens (ARTs) under the Markets in Crypto-Assets Regulation (MiCA). This action immediately halts a regulatory softening, reinforcing the EBA’s position that ART reserves must adhere to a strict prudential framework to prevent systemic liquidity risk and regulatory arbitrage across the EU. The EBA’s Opinion asserts the EC’s changes are inconsistent with MiCA Articles 36(1)(b) and 38(1), which mandate a strong alignment with existing banking liquidity requirements.

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Context

Prior to this Opinion, the legal landscape for stablecoins in the EU was moving toward harmonization under MiCA, but a critical ambiguity persisted regarding the precise composition and liquidity of the required reserve assets. The EC’s subsequent proposal to amend the EBA’s draft RTS introduced a significant compliance challenge by suggesting a potential deviation from the strict, bank-like prudential standards the EBA had originally set. This created uncertainty for prospective ART issuers about the ultimate capital and operational requirements necessary to achieve regulatory compliance.

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Analysis

The EBA’s decisive rejection means that ART issuers must continue to model their compliance frameworks on the highest standard of reserve liquidity and composition, which mirrors the traditional banking sector’s requirements. This directly alters product structuring by requiring ART issuers to hold a greater proportion of highly liquid, minimal-risk assets. The operational cost of capital will increase for issuers, but the risk profile of the token will be significantly reduced, aligning with MiCA’s core financial stability mandate. The chain of effect ensures the EU stablecoin market is anchored by a conservative, low-risk prudential framework, ensuring the financial stability objectives of MiCA are met.

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Parameters

MiCA Articles Cited ∞ Articles 36(1)(b) and 38(1). (These articles govern the composition and liquidity of the reserve assets.)
EBA Draft RTS Submission Date ∞ June 13, 2024. (The date the EBA submitted its original, stricter draft to the EC.)
EC Amendment Date ∞ August 28, 2025. (The date the EC informed the EBA of its intention to amend the draft RTS.)

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Outlook

The immediate next phase involves the European Commission’s response to the EBA’s Opinion, which may lead to further negotiation or a formal decision to proceed with or withdraw the proposed amendments. Should the EBA’s stricter standards prevail, this action sets a strong, conservative precedent for global prudential regulation of stablecoins, signaling that European authorities prioritize financial stability and systemic risk mitigation over market flexibility. This regulatory certainty, though strict, is likely to accelerate institutional adoption by establishing a trusted, bank-grade standard for ARTs.

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Verdict

The EBA’s defense of stringent reserve liquidity standards under MiCA is a critical win for financial stability, cementing a conservative, bank-like prudential framework for the future of the EU stablecoin market.

Asset Referenced Tokens, Liquidity Requirements, MiCA Regulation, European Banking Authority, Regulatory Technical Standards, Prudential Framework, Systemic Risk, Regulatory Arbitrage, Reserve Assets, Digital Finance, EU Policy, Stablecoin Issuers, Banking Liquidity, Financial Stability Signal Acquired from ∞ europa.eu