The main executive organization of the European Union has adopted a gentle approach to Stablecoins, contrasting with that of the European Central Bank (ECB) and trigger the optimism of the industry.
In response to ECB’s concerns on the potential risks of benches from the multi-development of stablescoin in Europe and third countries, the European Commission (EC) said that these risks were “very unlikely”.
A commission spokesperson told Cintelegraph: “Even in the very improbable case of a race on a token issued jointly, the acquisitions by foreign holders would occur mainly in jurisdictions like the United States, where most of the tokens are circulating and most of the reserves take place.”
The position of the commission on the multi-development of stablescoin in the EU and elsewhere has important implications for industry, marking a major victory, according to local industry observers.
The ECB warned against banking risks in April
Brussels softening approach to foreign floors contrasts with the previous warnings of the ECB, which published a non-Papier in April on the EU and the third multi-development stable country.
“A multi-frequency system of the EU and third country of the country would considerably weaken token emitters in electronic money (EMT) of the EU by increasing the probability of a race, because EU issuers may not have enough reserve assets under the supervision of the EU authorities to respond to requests for re-evaluation by the EU and not the EU
The ECB has also warned that the joint emission of stablescoin with third countries could undermine financial stability by weakening the guarantees for EU consumers and bypassing critical market protections in the regulation of cryptocurrencies (Mica).
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It can also allow foreign issuers to falsely claim compliance with the EU level, to transfer regulatory responsibility to the EU authorities without appropriate supervision and to open the door to EU companies to access the single market without respecting the EU standards, said the non-paper.
Brussels says the risks are manageable
After addressing the BCE warnings, the commission in June published an in -depth analysis of the implications of the joint stablecoin program with third countries in an article entitled “Stablecoins and digital Euro: friends or enemies of European monetary policy?”
“We note that there are significant institutional and regulatory obstacles to the wider adoption of foreign stables in the euro zone,” said the Commission in its study, adding that the regulation of the Mica has “discouraged significant foreign issuers to register in Europe”.
The Commission has specifically referred to Tether, the USDT (USDT) issuer, the largest stable in the world by market capitalization, which has refused to comply with the Mica for reasons, including the need to keep at least 60% of their reserves in European banks.
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According to the Commission, the risks of the joint emission of the stablescoin with third countries are manageable with existing policies, because the issuers may be required to have a rebalancing mechanism to ensure that the reservations in the EU attenuation token in the EU.
“Very positive news and even relief”
According to Juan Ignacio Ibañez, member of the Technical Committee of the MICA Crypto Alliance, the Commission’s approach in the issuance of the stables of the Commission with other countries means that the authority will not force issuers like Circle to distinguish functionally USDC-US and USDC-UE.
“These actors are global entities issuing a stablecoin both in the EU and abroad,” said Ibañez at Cointtelegraph, adding that the Commission effectively argues for the fungible treatment of locally emitted and international parts, and for an entity to maintain the re -evalibility of the documents issued by the other entity.
“This is a very positive news and even relief,” said Ibañez. “A major component of the value of a stablecoin lies in its cross-border conviviality, which the stabbed inherit from the blockchain technology itself. The application of jurisdictional silos would undermine this fundamental characteristic and would degrade the user experience within the EU,” he added.
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