Lagarde: European Union should close loopholes in stablecoin regulation

European Union lawmakers should require foreign stablecoin issuers to adopt "safeguards" and a "strong regulatory equivalence regime" to prevent the risk of a run on reserves within the European Union, European Central Bank president Christine Lagarde said on Wednesday. "European legislation should ensure that such schemes cannot operate within the European Union unless they are supported by strong equivalence regimes in other jurisdictions and safeguards relating to asset transfers between European Union and non-European Union entities," she told a regulatory conference. She added: "This also highlights why international co-operation is essential. Without a fair global regulatory environment, risks will always look for the weakest link."