The European Commission says foreign stablecoins are not a big risk, easing crypto industry concerns.
- The EU sees little danger in joint stablecoin issuance with non-EU countries.
- Regulators say existing rules already reduce major risks.
- This move supports smoother cross-border crypto use in Europe.
European Commission Counters ECB’s Warnings
The European Central Bank (ECB) warned in April that allowing stablecoins to be issued in both the EU and other countries could cause financial risks. It said that EU issuers might not have enough reserves in Europe to handle large redemption requests from both EU and non-EU users. It also pointed out that such schemes could weaken rules under the Markets in Crypto-Assets Regulation (MiCA), making the financial system less safe.
The Commission Sees Risks as Low
In June, the European Commission disagreed with the ECB’s concerns. It said a stablecoin bank run is very unlikely. Most of these tokens and their reserves are based in the United States, not Europe. Therefore, even a worst-case event would likely be handled outside of the EU.
The Commission also said that strong EU laws already prevent risky behavior. For example, MiCA rules discourage foreign companies from ignoring EU laws. A major issuer, Tether, has chosen not to register in the EU because of these strict rules.
Stablecoin Issuers Welcome Decision
Crypto industry experts see this as a big win. According to Juan Ignacio Ibañez of the MiCA Crypto Alliance, this more flexible approach will make it easier for companies to manage one type of stablecoin across borders. That means smoother operations and a better user experience across different countries.
If the Commission had enforced strict separation between EU and non-EU stablecoins, it could have made crypto use inside the EU harder. Instead, the EU is now seen as welcoming to global crypto businesses that follow the rules.
Cross-Border Crypto Gets a Boost
This shift in tone by the Commission aligns with the nature of crypto. Blockchain is designed for global use. Creating barriers between EU and non-EU stablecoins would go against that idea. This new stance allows major players like Circle—which issues USDC—to operate more freely in both the US and EU, so long as they still meet EU standards.
Source: cointelegraph.com
