ECB’s lagarde Pushes for Unified Stablecoin Regulations Across EU Borders
Cristine Lagarde, the ECB President, has advocated for uniform regulations on stablecoins both within and outside the EU. She believes that disparities in rules could jeopardize investor protection and financial stability.
Lagarde highlighted liquidity risks and emphasized the necessity of stringent safeguards as stablecoins gain traction in cross-border transactions. Her stance indicates a important shift towards stricter supervision of stablecoins as part of the EU’s plan to promote the digital euro.
The ECB’s perspective has evolved from initial scepticism.A 2022 report dismissed euro-based stablecoins as risky assets. However, the ECB now sees stablecoins playing a crucial role in cross-border and crypto payments.
- stablecoins should comply with EU standards regardless of their origin.
- Lagarde calls for robust equivalence regimes and safeguard mechanisms globally.
- The Markets in Crypto-Assets Regulation (MiCAR) mandates reserve requirements for EU stablecoin issuers.
despite these measures,Tether,a top stablecoin issuer,opposes MiCAR. CEO Paolo Ardoino warns that these rules could destabilize banks. Multi-issuance schemes further expose enforcement gaps, posing challenges akin to those faced by multinational banks. Lagarde urges regulators worldwide to address these issues urgently.
With stablecoins rapidly expanding in crypto trading and international payments, the EU encounters dual challenges—regulating emerging stablecoins and advancing the digital euro’s acceptance.
