ESCB proposes EU-level supervision for CASPs and new reserve rules for stablecoins under MiCA

The European System of Central Banks (ESCB) has proposed a set of amendments to MiCA that would tighten stablecoin reserve rules, move crypto-asset service provider (CASP) supervision to the EU level, and pull staking and crypto lending into the regulatory perimeter. For PSPs and banks dealing with crypto rails, the direction of travel is pretty clear: more central oversight, less room for local interpretation, and stricter liquidity management for issuers.

1. The ESCB, which includes the European Central Bank (ECB) and the national central banks of EU member states, submitted its proposals to the European Commission as part of a review of MiCA. The central argument is simple: the framework should be adjusted based on implementation experience, crypto market developments, and new business models.
2. On supervision, the ESCB wants authorization, supervision, and enforcement for crypto-asset service providers to move from national regulators to the European Securities and Markets Authority (ESMA). That would push the system toward a single EU-level rulebook for CASPs instead of the current patchwork of national oversight.
3. The ESCB also wants capital requirements for CASPs to be recalibrated. Instead of focusing mainly on operating expenses, the proposal would take into account the financial and nonfinancial risks of each business, which matters especially for firms combining regulated crypto services with proprietary trading, lending, borrowing, staking, and leveraged activities.
4. For “significant” CASPs, the current benchmark of an average of 15 million active users over a calendar year would no longer be the only game in town. The ESCB proposed adding trading volume, assets under custody, balance sheet size, client transaction volume, cross-border activity, and systemic importance. Significant CASPs would also have to set up an intermediate parent undertaking in the EU.
5. Stablecoin reserves would be tightened as well. Under current MiCA rules, nonbank issuers must hold at least 30% of reserves as deposits with credit institutions, and significant electronic money tokens (EMTs) and asset-referenced tokens (ARTs) face a 60% requirement. The ESCB wants to remove fixed minimum deposit ratios and replace them with liquidity requirements based on asset maturities.
6. The ESCB proposed 1-day and 5-day reserve liquidity requirements using standards developed by the European Banking Authority (EBA). For significant stablecoins, at least 40% of reserve assets would have to mature within 1 business day and 60% within 5 business days; for other tokens, the thresholds would be 20% and 30%.
7. The proposal would also maintain and strengthen the ban on stablecoin yield by extending it to direct and indirect forms of remuneration. That includes arrangements involving crypto lending, staking, certain loyalty programs, and decentralized finance (DeFi) mechanisms.
8. Finally, the ESCB wants staking, crypto lending, and borrowing brought under EU-level regulation, with the services distinguished by their economic substance. In practice, that means these products would no longer sit in a gray zone simply because they do not look like traditional lending on the surface.

For high-risk PSPs, the immediate takeaway is that MiCA is moving further away from a light-touch passport and toward a more centralized, balance-sheet-aware regime. Stablecoin issuers, CASPs, and banks supporting them should expect stricter reserve management, closer scrutiny of cross-border activity, and less tolerance for products that blur the line between payments, yield, and credit.