😎 Germany🇩🇪 and Italy🇮🇹 are advancing a European regulatory framework for stablecoins…

😎 Germany🇩🇪 and Italy🇮🇹 are advancing a European regulatory framework for stablecoins…

…featuring multi-issuance models originating from third countries. This initiative could restrict access to the European market for some of the largest global operators, including those from the United States🇺🇸.

💡 Reminder: multi-issuance stablecoins are those issued simultaneously across multiple jurisdictions with reserves distributed among them.

💡 Identified risks: if European holders attempt to liquidate their positions simultaneously, the portion of reserves held within the EU may be insufficient, while the remaining funds would be subject to foreign regulatory frameworks, potentially delaying or preventing their transfer.

💡 Proposed measures: to mitigate these risks, the proposal (referred to as a “discussion paper”) requires ensuring the immediate transferability of reserve assets from non-European jurisdictions into the EU in the event of a liquidity shortfall, including during crisis scenarios. If this condition cannot be met, the European Banking Authority (EBA) would be required to prohibit the token’s circulation within the bloc.

💡 The document presented on March 27 also states that no foreign operator will be allowed to offer tokens in the EU unless the European Commission formally recognizes the regulatory framework of its home country as equivalent to that of the EU. Given that the United States currently lacks comparable legislation, this proposal could restrict access to the EU market for major issuers of USD-pegged stablecoins.

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