Global regulators define new thresholds for stablecoin issuers
Financial supervisors in Europe, the United States, and other markets are introducing combinations of liquidity and capital requirements for stablecoin issuers, with calibrations varying significantly across jurisdictions. The MiCAR (Markets in Crypto-Assets Regulation) requires that at least 30% of reserves be held as bank deposits, alongside this obligation specific capital requirements. The OCC (Office of the Comptroller of the Currency) proposals for implementing the GENIUS Act instead establish a floor of immediate liquidity at 10% and a requirement of accessibility within five business days at 30%. A new working paper from the BIS (Bank for International Settlements) provides the first comprehensive analytical framework to understand how these requirements interact and what effects they generate.
Quick Answer
Regulators are adopting different approaches to stablecoin regulation, with MiCAR requiring 30% of reserves in bank deposits and the OCC imposing a liquidity floor at 10%. A new BIS study analyzes how these requirements interact and influence issuer behavior, highlighting that capital rules have a broader impact than liquidity rules.
The BIS analytical model: dynamics and market impacts
The BIS paper models a fiat-backed stablecoin issuer that must decide how much capital to raise and how to allocate reserves between cash (safe but zero-yield) and bonds (yielding but with high liquidation costs). The model incorporates redemption shocks with momentum effects: a negative week tends to be followed by another negative week. This persistence was estimated through weekly flow data for five major US dollar-pegged stablecoins, from 2020 to 2025, and represents the engine that makes the model's dynamics realistic.
The asymmetry between liquidity and capital: impacts on issuer behavior
The research demonstrates that liquidity and capital influence issuers in distinct ways. A liquidity requirement pushes issuers to hold more cash without affecting capital. In contrast, a capital requirement induces issuers to both raise more capital and hold more cash, motivated by the need to reduce the risk of a forced sale of bonds that could erode capital. This asymmetry is crucial for regulators, as it highlights how capital has a broader effect than liquidity, despite the latter receiving more attention in regulatory debates.
Implications for compliance and risk management
For stablecoin issuers, adopting these requirements presents significant challenges in reserve management and capital planning. The need to hold more cash to meet immediate liquidity and five business day requirements necessitates a reorganization of investment strategies, directly impacting returns. At the same time, raising additional capital can increase financing costs and influence the economic sustainability of issuers.
The future perspective: towards harmonized regulation
As regulators continue to develop regulatory frameworks for stablecoins, the BIS analysis provides a scientific basis for assessing the effectiveness of different approaches. The difference between liquidity and capital thresholds highlighted in the study underscores the need for a balanced approach that considers both short-term stability and the long-term sustainability of issuers. For crypto-asset markets, harmonized regulation could foster investor confidence and system stability, while reducing systemic risks.
The importance of academic research in financial regulation
The BIS working paper represents a significant example of how academic research can contribute to the formulation of more effective public policies. By providing a rigorous analytical framework to understand the interactions between liquidity and capital, the study offers supervisory bodies concrete tools to design rules that balance stability and innovation. For stablecoin issuers and industry operators, understanding these dynamics is essential to navigate a rapidly evolving regulatory landscape.
The challenges for issuers: balancing liquidity and yield
One of the most critical aspects for stablecoin issuers concerns reserve management. The BIS model demonstrates that holding more cash reduces the risk of a forced sale of bonds, but at the expense of yield. This trade-off is particularly relevant in a context of low-interest rates, where the yield on cash reserves is close to zero. Issuers must therefore find a balance between liquidity and yield.
Editorial Note and Disclaimer
The guides and content published on GoYou are the result of independent research and analysis activities, for informational, educational, and in-depth purposes.
GoYou does not constitute a journalistic publication or an editorial product pursuant to Law No. 62/2001 and does not perform real-time information activities.
The GoYou project does not provide professional, technical, legal, or financial advice and disclaims any liability for the improper use of the information published.
In the Crypto sector, every investment involves risks: readers are invited to always inform themselves autonomously before making any decision.