Brussels plans to introduce new regulations for stablecoins, despite the European Central Bank (ECB) warning that it could put pressure on the banking system in a volatile market.
The European Commission, the EU's executive arm, is expected to issue formal guidance in the coming days, according to the Financial Times. The regulation would allow stablecoins issued outside the European Union to be recognized as equivalent to domestic stablecoins if they are branded.
People familiar with the plan say it would close a legal loophole around non-bank-based cryptocurrencies.
The announcement follows remarks by ECB President Christine Lagarde to the European Parliament on Monday. She warned that “stablecoins… pose risks to monetary policy and financial stability and therefore need to be regulated with stricter controls, especially when operating across borders.”
Stablecoin market booms while legal framework lags
Stablecoins are designed to hold a stable value in a national currency, most commonly the USD. They are backed by liquid assets held in reserve. There are currently about $250 billion worth of stablecoins in circulation, and analysts predict the market could grow tenfold in the next few years.
US Treasury Secretary Scott Bessent predicts that this total value could reach $2 trillion globally, contributing to the US dollar's dominance. US lawmakers are moving closer to passing the Genius Act, the first piece of legislation to oversee the stablecoin market.
However, central banks are increasingly wary of regulations that could boost growth but also leave loopholes.
The ECB believes that if stablecoins issued abroad are treated similarly, a wave of withdrawals could put pressure on EU banks. Under current rules, domestic stablecoins must hold a majority of their reserves in EU banks and allow holders to exchange their tokens for cash directly.
The ECB warns that recognizing foreign stablecoins as equivalent increases the risk of a run on the banking system.
Ms. Lagarde stressed that if withdrawals “are amplified by large and difficult developments in stablecoins, European protection and backup mechanisms could be threatened.”
Divisions in EU agencies on risk and supervision
Diego Ballon Ossio, a partner at Clifford Chance in London, said regulations could conflict between countries. “From a legal standpoint, tokens cannot be considered completely equivalent,” he said, stressing that EU law attaches oversight to the issuer, not the token.
The Bank for International Settlements (BIS) also said that stablecoins “fail” on key criteria for use as currencies. They are not backed by a central bank, lack mechanisms to prevent illicit activity, and do not have the same flexible funding sources as traditional banks.
Within the EU, the Commission and the ECB have been at odds in closed-door meetings this year.
The Commission rejected the ECB’s warning, saying the risk of a mass withdrawal of well-regulated stablecoins is “very unlikely” and that if it did, “foreign token holders would withdraw in the United States, where the majority of stablecoins are in circulation and held,” the source said.
A crypto industry leader said the ECB’s warning reflects concerns that issuers’ reserves could end up in small banks. He also said the ECB wants to promote central bank digital currencies (CBDCs) to compete with private stablecoins.
To provide additional assurances, ECB officials have proposed requiring other countries to provide legal commitments to transfer stablecoin reserves to the EU in the event of a crisis.
There is currently no agreement between the EU and other countries on equivalent regulatory standards. A Commission official at the closed-door meeting suggested that such a commitment was unnecessary, prompting an ECB member to ask: “Should we have absolute confidence that they will transfer assets when there is a withdrawal from the EU reserves?”
Instead, the Commission recommends that national supervisory authorities assess risks themselves and request additional protection where necessary.
Andrea Resti, professor of financial risk management at Bocconi University, warned that this approach could lead to uneven supervision. “European supervisors are issuing licenses in very short periods of time without sufficient scrutiny. Everything will depend on the manual initiative of national supervisors,” he said.
Source: https://tintucbitcoin.com/eu-de-xuat-quy-dinh-stablecoin-moi/
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