ECB President calls for addressing risks of non-EU stablecoins

PANews reported on September 4 that according to Cointelegraph, European Central Bank (ECB) President Christine Lagarde called on policymakers to fill the gaps in stablecoin regulation, especially for those stablecoins issued outside the EU's "sound" crypto-asset market regulation (MiCA) framework.

In prepared remarks for the ninth annual meeting of the European Systemic Risk Board on Wednesday, Lagarde said EU lawmakers should take appropriate measures for the joint issuance of stablecoins by entities regulated by MiCA and non-EU entities; unless there is a "robust and equivalent regulatory system" in the issuing country, including allowing EU investors to "always be able to redeem their stablecoins at face value" and requiring issuers to fully back their 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, as MiCA also prohibits redemption fees. But reserves held in the EU may not be sufficient to meet such concentrated redemption needs."