Circle and Tether Both Oppose MiCA Stablecoin Bank Reserve Requirements

WHY IT MATTERS

Stablecoins are cryptocurrencies designed to maintain a steady value, usually pegged to a currency like the US dollar or euro. To keep that peg, issuers hold reserves — assets that back each token. Think of it like a coat check: for every coat (stablecoin) you hand out, you need to have a real coat (reserve asset) stored safely so people can reclaim it. The EU's MiCA law requires stablecoin issuers to keep a chunk of those reserves in European bank accounts. Circle and Tether both argue this is risky because if that bank fails, the reserves could be lost — similar to how putting all your valuables in one storage locker is riskier than spreading them across several secure locations. This debate matters because stablecoins are widely used in crypto trading and payments, and the rules governing their reserves affect how safe they are for everyday users.