EU Proposes Ban on Multi-Issuer Stablecoins to Bolster Financial Stability
The European Systemic Risk Board (ESRB) has proposed a ban on multi-issuer stablecoins, focusing on those issued jointly within the EU and other jurisdictions. This recommendation, backed by the European Securities and Markets Authority (ESMA), follows calls by European Central Bank President Christine Lagarde for stricter cryptocurrency regulation. The ESRB's non-binding recommendation targets multi-issuer stablecoins, focusing on those issued jointly within the EU and other jurisdictions. This move aligns with the EU's Markets in Crypto-Assets (MiCA) Regulation, with ESMA first proposing the initiative in October 2024. If implemented, the policy could significantly impact companies like Circle and Paxos, which issue stablecoins. The ESRB's aim is to mitigate systemic risks and ensure financial stability. The ESRB's recommendation, if approved, could lead to a significant shift in the stablecoin landscape. It reflects the EU's commitment to strengthening cryptocurrency regulation and protecting investors. The final decision, however, lies with the European Commission, which will consider the recommendation in the context of the MiCA Regulation.
