The main executive body of the European Union has produced a soft approach to Stablecoins, which contrasts with the European Central Bank (ECB) and industrial development.
In response to ECB concerns with potential risks running the bank derived from Stablecoin Multi-issue in Europe and third countries, the European Commission (EC) said these risks were “quite unlikely.”
“Although at the very unlikely event of a running to a jointly issued token, redemption of foreign holders will take place in constituents such as the US, where most of the tokens are moving and most of the reserves are held,” a spokesman for the commission told the cointelegraph.
The Stablecoin Commission’s stance on the EU and elsewhere has significant implications for the industry, which marked a major win, according to industry observers.
ECB warns of bank risks in April
Brussels’s softening approach to foreign stablecoins is contrast to previous warnings from ECB, which Na -Published A non-role in the EU and third-country Stablecoin multi-issue in April.
“An EU and third country Stablecoin multi-issue schemes will significantly weaken the EU’s neat regime for electronic currency tokens (EMT) who provided adequate reserve properties under the supervision of EU authorities to fulfill the redemption requests of both EU and non-EU token holders,” ECB wrote.
The ECB also warned that joint stablecoin issuance in third countries could break finance stability by weakening care for EU consumers and avoiding critical protection of the Crypto-Assets regulation markets (MICA).
Related: Digital Euro, Non Mica, Key to Managing Crypto Dangers: Italian Bank Leader
It can also enable foreigners who have given incorrect claims of compliance with the EU level, transferring regulatory liability to EU authorities without proper administration, and open the door for non-EU firms to access the single market without meeting the standards in the EU, the paper said.
Brussels said the risks would be managed
After meeting ECB warnings, the Commission in June Issued An in-depth review of the implications of the joint stablecoin issuing in third countries in a paper entitled “Stablecoins and Digital Euro: friends or opponents of European financial policy?”
“We have found that there are significant institutional barriers and regulations on the broader adoption of foreign stablecoins in the Euro area,” the study commission said, adding that the regulation of MICA has “discouraged big foreigners who have been registered from European registration.”
The commission specifically defined Tether, who provided USDT (USDT), the world’s largest stablecoin by market capitalization, which refused to follow Mica Due to the factors including the request to maintain at least 60% of their reserves at European banks.
Related: Coinbase ensures MICA’s license, named Luxembourg as EU’s headquarters
According to the Commission, the risks of joint stablecoin issuance in third countries will be managed by existing policies, as the providers are required to have a re -balance mechanism to ensure reserves in the EU match token holdings in the EU.
“Very positive news and even a relief”
According to Juan Ignacio Ibañez, a member of the technical committee of the Mica Crypto Alliance, the Commission’s approach to the joint Stablecoin release in other countries means that the authority will not force those who gives such a circle to work between the USDC-US and USDC-EU.
“These players are global creatures that release a stablecoin both in the EU and abroad,” Ibañez told Cointelegraph, adding that the commission effectively promotes the fungible treatment of local and international issued coins, and for a creature to promote the redemption of coins released by other creatures.
“This is very positive news and even a relief,” Ibañez said. “A key ingredient in the value of a stablecoin lies in cross-border usability, whose stablecoins inherit from the blockchain technology itself. The implementation of the enclosed silos will reduce this basic feature and degrade the user experience within the EU,” he added.
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