European Commission: EU Cryptocurrency Rules Sufficient to Address Stablecoin Risks

ChainCatcher news, according to Reuters, the European Commission stated on Friday that the European cryptocurrency regulations are sufficient to address the risks of stablecoins, and after the European Central Bank called for more safeguards, it believes that no major adjustments are necessary.

Europe has introduced landmark cryptocurrency-specific regulations, but Brussels lawmakers are under pressure from the European Central Bank to prevent the "multi-jurisdictional issuance" model of stablecoins. The controversy centers on whether multinational stablecoin companies can consider their tokens issued within the EU as interchangeable with tokens held outside the EU.

On Tuesday, six cryptocurrency industry associations, including Circle, wrote to EU commissioners, urging the issuance of guidance to confirm the multi-jurisdictional issuance model and clarify how it operates under the Markets in Crypto-Assets Regulation (MiCA).

An EU Commission spokesperson stated that MiCA provides a strong and proportionate framework to address stablecoin risks and is working to provide clarifications as soon as possible. The European Systemic Risk Board noted that the multi-jurisdictional issuance structure has inherent risks, while the European Central Bank is concerned about triggering reserve runs; however, stablecoin issuers claim they have sufficient reserves to handle redemptions.