EU watchdog pushes for stablecoin ban: Report

Stablecoins issued jointly by companies in the EU and other regions could come under scrutiny from local authorities following a reported warning from a watchdog group.

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.

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