EU Proposes Ban on Multi-Issuer Stablecoins, Impacting Circle and Paxos
The European Systemic Risk Board (ESRB) has proposed a ban on stablecoins issued by multiple entities within the EU. This move, if approved, could significantly impact companies like Circle and Paxos.
The ESRB's recommendation targets stablecoins backed or managed by several firms, rather than a single issuer. These multi-issuer stablecoins, often issued jointly across the EU and other jurisdictions, are in the regulatory crosshairs. The proposal aims to mitigate systemic risks associated with these cryptocurrencies.
European Central Bank President Christine Lagarde has been vocal about the need for stricter cryptocurrency regulation. Her stance aligns with the ESRB's recommendation, indicating a potential shift in EU policy. If implemented, this ban could pressure authorities to restrict the operations of companies issuing multi-issuer stablecoins.
The ESRB's proposed ban on multi-issuer stablecoins, if approved, could reshape the stablecoin landscape in the EU. Companies like Circle and Paxos, which issue stablecoins involving multiple entities, may face operational changes or restrictions. The final impact remains to be seen as the proposal navigates the regulatory process.
