EU Watchdog Supports Ban On Particular Stablecoins
The European Systemic Risk Board (ESRB) has recommended a ban on certain stablecoins jointly issued in the EU and other jurisdictions. While the policy is not legally binding, it could pressure regulators to restrict the activities of stablecoin issuers operating in the region. Critics argue this proves the ECB seeks to favor only the digital euro over other stablecoins.
A growing transatlantic divide
Recent speeches by American Federal Reserve and German Bundesbank officials highlighted sharply contrasting views on stablecoins. While Federal Reserve Governor Christopher Waller endorsed private-sector cryptocurrencies, Bundesbank President Joachim Nagel warned against supporting “innovation for innovation’s sake.”
At the Sibos banking and financial conference in Frankfurt, Waller said: “If stablecoins present a lower-cost alternative to consumers and businesses, I am all for it.” He also criticized the ECB’s digital euro plans, arguing that the private sector is better positioned to innovate. “You don’t want the government to decide what technologies are in or out,” he added.
Nagel responded: “We, as central banks, will not accept any developments that weaken our ability to implement monetary policy effectively. The anchor role of central bank money must not be weakened.”
ECB’s cautious stance
Nagel’s speech reflected the ECB’s general position on stablecoins. Shortly after, the ESRB passed a recommendation to ban certain stablecoins issued jointly in the EU and abroad.
The move came weeks after ECB President Christine Lagarde urged policymakers to address gaps in crypto regulation, particularly in stablecoins issued by non-EU entities. It remains unclear, however, whether the proposed ban will gain traction among lawmakers and authorities capable of enforcing it.
Market reactions and industry initiatives
Some critics view the move as a response to the announced partnership between Deutsche Börse Group and Circle Internet Group. The two companies signed a memorandum of understanding to integrate Circle’s EURC and USDC stablecoins into Deutsche Börse’s financial market infrastructure. According to the firms, their collaboration is supported by MiCA regulation.
Meanwhile, another stablecoin initiative is underway within the EU. Nine major banks, including ING, UniCredit, and CaixaBank, recently announced plans to create a euro-backed stablecoin supervised by the Dutch Central Bank. Their ambition is to launch a MiCA-compliant token by 2026, capable of competing with dominant American stablecoin issuers.
Sources:
https://www.ft.com/content/64123e43-1d70-4b78-abc8-e1a5f7969c5a
https://www.ft.com/content/eb013c4e-ed53-498b-9d75-2b5d9c7ecc65
https://cointelegraph.com/news/european-union-stablecoin-ban-report
https://www.cointribune.com/en/the-european-union-pressures-foreign-stablecoins/