Warning to Association Members from the President of the European Banking Authority: ‘Veto Stablecoins If Needed!’

European Banking Authority (EBA) The chief executive said that if central banks thought they could upset monetary policy, it would be a big deal, for fears that the use of permissionless blockchains could prove to be financially unsound. stablecoins He said they should veto it.

European Union Approaches Stablecoins With Caution

In the coming months, EBA President José Manuel Campa will endorse the European Union’s regulation of Crypto Asset Markets, a landmark framework that will require stablecoin issuers to obtain a license and have appropriate reserves. (MiCA) will determine the detailed rules to implement.

“Central banks should have the power to veto the widespread use of so-called stablecoins if they affect public policy goals, including financial stability or monetary policy,” Campa said at an event hosted by the think tank OMFIF today.

Campa’s agency will also be responsible for direct supervision of major issuers under the MiCA.

MiCA allows central banks to intervene in new stablecoin issuance proposals, called asset-referenced tokens in MiCA.

It also requires that issuance be halted if the tokens become widely used with more than 1 million transactions per day.

Campa said he could see a future where stablecoins will become even more important as a means of payment, just as private payment systems currently complement central bank money.

But he stressed that they must adhere to “reasonable security measures”, including complying with anti-money laundering laws.

MiCA will receive final signature from finance ministers next week, and its provisions will likely take effect around July 2024. Circle and Unstoppable Finance Major players such as MiCA have already announced their intention to issue stablecoins under MiCA.

*Not investment advice.