ECB President Calls for Addressing Risks of Non-EU Stablecoins

ChainCatcher News, according to market sources, European Central Bank (ECB) President Christine Lagarde has called on policymakers to fill regulatory gaps regarding stablecoins, especially those issued outside the EU's “robust” crypto asset market regulation framework (MiCA).

In her prepared remarks for the ninth annual meeting of the European Systemic Risk Board on Wednesday, Lagarde stated that EU legislators should take appropriate measures for situations where entities regulated by MiCA jointly issue stablecoins with non-EU entities. Unless there is a “robust and equivalent regulatory regime” in the issuing jurisdiction—including allowing EU investors to “always redeem their stablecoins at face value” and requiring issuers to fully back the issued stablecoins with reserves—such stablecoin issuers should not be allowed to operate in the EU.

Lagarde said: “In the event of a run, investors will naturally tend to redeem in the jurisdiction with the strongest safeguards, which is likely to be the EU, since MiCA also prohibits redemption fees. But the reserves held in the EU may not be sufficient to meet such concentrated redemption demands.”