Published by Global Banking & Finance Review®
Posted on October 10, 2025
2 min readLast updated: January 21, 2026
Add as preferred source on GoogleThe European Commission states existing rules are sufficient for stablecoin risks, despite ECB's call for more safeguards.
By Elizabeth Howcroft
(Reuters) -Europe's crypto rules do enough to address the risks around stablecoins, the European Commission said on Friday, signalling it does not see the need for major change after the European Central Bank called for more safeguards.
Stablecoins - cryptocurrencies pegged to real-world currencies - are among the fastest-growing parts of the digital assets industry, with the U.S. this year passing legislation to promote their usage.
Europe has launched a landmark set of crypto-specific rules, but lawmakers in Brussels are facing pressure from the ECB to block the so-called "multi-issuance" stablecoin model.
ECB CALLS FOR SAFEGUARDS
At the heart of the dispute is the question of whether a multinational stablecoin company can treat the tokens it issues within the EU as interchangeable with those held outside the EU.
In a letter sent to European Commissioner Maria Luis Albuquerque on Tuesday, six crypto industry associations, whose members include major stablecoin issuer Circle, called on the EU to publish guidance "confirming multi-issuance in principle" and clarify how it works under the EU's crypto rules, called MiCA.
"We believe MiCA provides a robust and proportionate framework for addressing risks stemming from stablecoins," a Commission spokesperson told Reuters in emailed comments, acknowledging receipt of the letter.
"The Commission is working towards providing such clarification as soon as possible."
The European Systemic Risk Board, headed by ECB President Christine Lagarde, has said that the multi-issuance structure would bring built-in risks for financial stability and called for urgent safeguards.
The ECB is concerned that people holding tokens created by a stablecoin's non-EU entity could choose to redeem it with the EU entity, potentially creating a run on reserves held within the EU.
But stablecoin issuers say that they can make sure they always have enough reserves to meet redemption requests, wherever they take place.
JP Morgan analysts said this week that 99% of stablecoin supply is pegged to the dollar, and that the sector's growth would boost demand for the greenback.
(Reporting by Elizabeth Howcroft. Editing by Tommy Reggiori Wilkes and Mark Potter)
A stablecoin is a type of cryptocurrency that is pegged to a stable asset, such as a real-world currency, to minimize price volatility.
The European Commission is the executive branch of the European Union responsible for proposing legislation, implementing decisions, and managing the EU's day-to-day operations.
Safeguards in finance refer to measures and regulations put in place to protect the financial system from risks, ensuring stability and security for investors and consumers.
The European Central Bank (ECB) is the central bank for the euro, responsible for monetary policy in the Eurozone and ensuring price stability.
The Markets in Crypto-Assets (MiCA) regulation is a legislative framework proposed by the European Commission to regulate the crypto-assets market and enhance investor protection.
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