A watchdog group established to respond to financial crises in the European Union reportedly pushed for a ban on multi-issuance stablecoins.
According to a Tuesday Bloomberg report, the European Systemic Risk Board passed a recommendation last week to ban certain stablecoins issued jointly in the EU and other jurisdictions. The policy, while not legally binding, could pressure authorities to restrict the activities of stablecoin issuers like Circle and Paxos, which operate in the region.
The reported move by the EU watchdog group came just a few weeks after European Central Bank President (ECB) Christine Lagarde called for policymakers to address crypto regulation, calling out potential gaps in stablecoins issued by non-EU entities. An official at Italy’s central bank also said in September that multi-issuance stablecoins posed certain risks to the EU’s financial stability.
It’s unclear at the time of publication whether the proposed stablecoin ban will gain support among authorities and lawmakers with the means to enact it. Some of the biggest stablecoins by market capitalization, including Tether (USDt), are pegged to the US dollar and not the euro.
Related: USDC issuer partners with Deutsche Börse for Europe stablecoin adoption
EU authorities are still exploring a digital euro
Though the issuance of a digital euro through the ECB is not a certainty, officials have been exploring a potential rollout since 2021.
ECB executive board member Piero Cipollone said in an interview last week that EU member states could reach an agreement on a digital euro “by the end of the year,” with a possible launch in 2029.
“We are designing a safe, reliable and universally accessible form of central bank money for the digital age,” said Cipollone in a Monday speech, adding: “The digital euro, alongside physical cash, can take on a leading role in preserving Europe’s resilience.”
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