European Union: European Cryptocurrency Rules Adequate to Address Stablecoin Risks

On October 10, according to Reuters, the European Union Commission said on Friday that European cryptocurrency rules are sufficient to deal with stablecoin risks, and after the European Central Bank called for more safeguards, it did not think there was a need for major adjustments. Europe has introduced landmark cryptocurrency special project regulations, but lawmakers in Brussels are under pressure from the European Central Bank to block the "multi-issuance" stablecoin model. The controversy focuses on whether multinational stablecoin companies can treat their tokens issued within the European Union as interchangeable with those held outside the European Union. On Tuesday, six cryptocurrency industry associations, including Circle, wrote to European Union commissioners calling for guidance confirming the multi-issuance model and clarifying how it operates under the Crypto Asset Markets Regulation (MiCA). A spokesperson for the European Union Commission said the MiCA provides a strong and proportionate framework for dealing with stablecoin risks and is providing clarification as soon as possible. The European Systemic Risk Committee called the multi-issuance structure inherently risky, the European Central Bank was concerned about triggering a run on reserves, and stablecoin issuers said they had enough reserves to withstand redemptions.