EU Weighs Stablecoin Restrictions Amid Financial Stability Concerns
Citing potential risks to the financial system, a key European Union watchdog has advocated for prohibiting a specific type of stablecoin.
The European Systemic Risk Board is recommending a ban on stablecoins that are issued jointly by multiple entities across different jurisdictions.
This policy suggestion, detailed in a Bloomberg report, stems from concerns that these “multi-issuance” coins could pose a systemic risk. The recommendation, though not legally binding, adds substantial weight to the growing regulatory pressure on the crypto industry from EU authorities.
It follows warnings from both ECB President Christine Lagarde and Italy’s central bank about the dangers of unregulated stablecoins, especially those pegged to foreign currencies like the US dollar. The debate now moves to policymakers who must balance innovation with financial safeguarding.
