The European Union faces a regulatory divergence on stablecoins, with the European Commission asserting that existing rules under the Markets in Crypto-Assets (MiCA) framework are adequate, while influential bodies like the European Central Bank (ECB) and France’s central bank advocate for more stringent oversight. This disagreement centers on the potential risks associated with “multi-issuance,” a practice allowing global stablecoin issuers to operate identically within and outside the EU.
Navigating Stablecoin Risks
Stablecoins, digital assets designed to maintain a stable value by pegging to traditional currencies, have experienced significant growth. While the EU has implemented the comprehensive MiCA regulations, the ECB and its associated European Systemic Risk Board (ESRB) express concerns that current rules do not sufficiently address the systemic risks posed by multi-issuance. The ESRB warns that such practices could facilitate bank runs on European reserves if users opt to redeem tokens issued outside the EU through the company’s European entities, potentially jeopardizing financial stability. Industry participants, including major stablecoin issuer Circle, have petitioned the Commission for clarification, asserting that MiCA provides a sufficient framework and that they maintain adequate reserves to manage redemptions globally.
France Advocates for Centralized Supervision
Beyond the ECB’s concerns, the Bank of France is pushing for a more centralized regulatory approach. Governor François Villeroy de Galhau has called for the European Securities and Markets Authority (ESMA) to directly supervise major crypto-asset issuers under MiCA. This proposal stems from a desire to ensure consistent rule application across the EU, mitigate regulatory arbitrage, and protect European financial independence. The concern is that fragmented national oversight could lead to uneven enforcement, particularly as the crypto industry rapidly expands.
The Bank of France argues that direct ESMA supervision would prevent regulatory disparities and ensure that significant market players adhere to uniform standards. Villeroy de Galhau views the multi-issuance permission within MiCA as a potential loophole that could undermine the euro and foster an over-reliance on non-European, less regulated entities. This perspective echoes concerns previously raised by the Bank of Italy, which highlighted the potential for multi-issuance models to negatively impact financial stability.
Blockchain developer and writer, Daniel combines hands-on coding experience with accessible storytelling. He holds multiple blockchain certifications and authors technical explainers, protocol deep-dives, and developer tutorials to help readers navigate the intersection of code and finance.