The post EC’s Soft Tone On Foreign Stablecoins Sparks Optimism appeared on BitcoinEthereumNews.com.

The European Union’s main executive body has taken a soft approach toward stablecoins, contrasting with that of the European Central Bank (ECB) and sparking industry optimism. In response to ECB concerns on potential bank run risks stemming from stablecoin multi-issuance in Europe and third countries, the European Commission (EC) said such risks are “highly unlikely.” A spokesperson for the Commission told Cointelegraph, “Even in the highly unlikely event of a run on a jointly issued token, redemptions by foreign holders would primarily occur in jurisdictions like the US, where most tokens circulate and the bulk of reserves are held.” The Commission’s stance on stablecoin multi-issuance in the EU and elsewhere has significant implications for the industry, marking a major win, according to local industry observers. ECB warned of bank run risks in April Brussels’ softening approach to foreign stablecoins contrasts with previous warnings from the ECB, which published a non-paper in April on the EU and third-country stablecoin multi-issuance. “An EU and third country stablecoin multi-issuance scheme would significantly weaken the EU’s prudential regime for electronic money token (EMT) issuers by increasing the likelihood of a run as EU issuers may not have enough reserve assets under the supervision of EU authorities to fulfil redemption requests by both EU and non-EU token holders,” the ECB wrote. A generic example of EU and third-country stablecoin mult-issuance applied to the EU and the US. Source: ECB The ECB also warned that joint stablecoin issuance with third countries could undermine financial stability by weakening safeguards for EU consumers and bypassing critical protections of the Markets in Crypto-Assets Regulation (MiCA). Related: Digital euro, not MiCA, key to managing crypto risks: Bank of Italy chief It may also enable foreign issuers to falsely claim EU-level compliance, shift regulatory accountability to EU authorities without proper oversight,…

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Filed under: News - @ June 27, 2025 4:26 am