At the ninth annual conference of the European Systemic Risk Board, ECB President Christine Lagarde highlighted the need for enhanced stablecoin regulation in the EU.
Regulation of Stablecoins in the EU
Christine Lagarde called on EU lawmakers to address gaps in stablecoin regulation, particularly for those issued beyond the stringent MiCA framework. She emphasized that such stablecoin issuers should not be allowed to operate in the EU without robust equivalence regimes in place.
Impact on the Digital Euro
The European Central Bank is exploring the potential rollout of a digital euro, but pressures from stablecoin regulations may accelerate this process. Lagarde noted that in the event of insufficient reserves held in the EU, investors would prefer to redeem assets in jurisdictions with the strongest safeguards.
Competition in the Stablecoin Market
With the US preparing to implement new stablecoin laws, it has been reported that China may also be considering launching a stablecoin pegged to the renminbi. This adds further tension in the competition among regions to develop their digital currencies.
Lagarde's remarks underscore the importance of internal regulation of stablecoins in the EU, especially amidst changes occurring in the US and potential similar initiatives in China. Regulation plays a crucial role in ensuring investor safety and financial system stability.
