On May 28, 2026, UniCredit, a major Italian bank, warned that under the European Union’s (EU) new crypto-asset regulation, “MiCA (Markets in Crypto-Assets Regulation),” the EU’s deposit insurance system might not have sufficient capacity to respond in the event of a crypto-asset-related banking crisis.This warning is based on concerns that the current deposit insurance system (capped at 100,000 euros) may not be able to withstand the financial stress caused, in particular, by large-scale stablecoin reserve accounts.It has been pointed out that while U.S. regulators provide more comprehensive protection, the EU system still faces challenges. This issue offers important insights regarding both the sound development of crypto assets in Europe and financial stability.
Details of UniCredit’s Warning
UniCredit, a major Italian bank, has expressed concerns regarding financial stability in Europe.
The bank has warned that the EU’s deposit insurance system may be unable to cope with a banking crisis related to cryptocurrencies.
In particular, large stablecoin reserve accounts are viewed as a problem.
The current deposit insurance system may not be able to fully absorb the stress these accounts place on the financial system.
This warning highlights the challenges under the EU’s proposed “MiCA” crypto assets regulation.
Overview and Objectives of MiCA
MiCA (Markets in Crypto-Assets Regulation) is a comprehensive crypto-asset regulation enacted by the European Union.
It aims to enhance the transparency and stability of the crypto-asset market.
It seeks to protect investors by imposing strict requirements on issuers and service providers.
In particular, detailed rules regarding the holding and management of reserves have been established for stablecoins.
However, UniCredit points out that this regulation does not resolve the challenges facing deposit insurance.
Challenges Facing the European Deposit Insurance System
The EU deposit insurance system is a mechanism designed to protect depositors in the event of a bank failure.
Under the current system, deposits are protected up to a maximum of 100,000 euros (approximately 17 million yen) per depositor.
This cap is intended for ordinary individual depositors.
However, the large reserve accounts held by stablecoin issuers may not fit within this framework.
Since massive amounts of funds are concentrated in a single account, there is a risk that they could exceed the protection limit.
Therefore, in the event of a crisis, it is conceivable that deposit insurance alone would not be sufficient to address the situation.
Differences in Protection Levels Compared to U.S. Regulations
UniCredit also notes the differences in protection levels between the United States and Europe.
In the United States, regulators are said to provide more comprehensive protection.
This refers to cases where “full protection” for depositors is guaranteed in the event of a financial institution’s failure.
In contrast, the EU system has clearly defined caps and is structured in a way that cannot fully cover large deposits.
This difference in protection levels could lead to differences in resilience during a financial crisis related to crypto assets.
Consequently, Europe is viewed as being in a more vulnerable position compared to the United States.
Impact on the Stability of Stablecoins
Stablecoins are crypto assets whose value is pegged to fiat currencies or other assets.
Their stability depends heavily on the soundness of the reserve accounts backing them.
If the reserves are held at a bank, the bank’s soundness and the scope of deposit protection become critical.
If deposit insurance is insufficient, the reserves backing large-scale stablecoins could be at risk.
This could undermine the stability of the stablecoin’s value and, in turn, affect the entire crypto asset market.
Therefore, the issue of deposit protection is directly linked to the credibility of stablecoins.
Implications for the Future of the European Financial System
UniCredit’s warning points to new challenges facing the European financial system.
Although the implementation of MiCA regulations is progressing, unresolved issues remain regarding integration with existing financial infrastructure.
In particular, there will likely be discussions on how to structure deposit protection to suit the characteristics of digital assets.
In response to this warning, European authorities may be compelled to review deposit insurance systems and consider additional safeguards.
As crypto assets become more deeply integrated into the financial system, managing the risks associated with them will become increasingly important.
We must carefully monitor future developments in Europe.
[Source: Original Article]
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