The EU proposed to give central banks the right to ban stablecoins

Central banks should have the right to restrict the widespread adoption of large stablecoins if they are deemed by regulators to affect public policy objectives. This statement was made by the Chairman EBA José Manuel Campa, writes CoinDesk.

In his opinion, this initiative will help reduce the risks to financial stability and monetary policy.

He clarified that his office will directly supervise large issuers as part of the rules for regulating the crypto-assets market (MiCA), which EU legislators adopted in April.

According to the EBA chairman, the bill will allow central banks to intervene in the process of issuing new “stablecoins”. It also requires a specific stablecoin to cease issuance if the daily number of transactions with it exceeds 1 million.

Campa sees a future in which this asset class “becomes even more relevant” as a means of payment. However, issuers must comply with “reasonable restrictions,” including antitrust and anti-money laundering regulations, he explained.

The official shares the concerns expressed by the US central bank about the free placement of stablecoins on decentralized sites. He believes that this can lead to disastrous consequences for investors.

According to him, new “stable coins” are subject to mandatory stress testing. Prior to approval, experts will analyze smart contracts, the issuer’s business model, and the redemption mechanism.

Recall that in April, the head of the EBA stressed the need to diversify stablecoin reserves. He called on issuing companies to eliminate conflicts of interest, as well as display the connection of vaults with trading platforms.

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Central banks should have the right to restrict the widespread adoption of large stablecoins if they are deemed by regulators to affect public policy objectives. This statement was made by the Chairman EBA José Manuel Campa, writes CoinDesk.

In his opinion, this initiative will help reduce the risks to financial stability and monetary policy.

He clarified that his office will directly supervise large issuers as part of the rules for regulating the crypto-assets market (MiCA), which EU legislators adopted in April.

According to the EBA chairman, the bill will allow central banks to intervene in the process of issuing new “stablecoins”. It also requires a specific stablecoin to cease issuance if the daily number of transactions with it exceeds 1 million.

Campa sees a future in which this asset class “becomes even more relevant” as a means of payment. However, issuers must comply with “reasonable restrictions,” including antitrust and anti-money laundering regulations, he explained.

The official shares the concerns expressed by the US central bank about the free placement of stablecoins on decentralized sites. He believes that this can lead to disastrous consequences for investors.

According to him, new “stable coins” are subject to mandatory stress testing. Prior to approval, experts will analyze smart contracts, the issuer’s business model, and the redemption mechanism.

Recall that in April, the head of the EBA stressed the need to diversify stablecoin reserves. He called on issuing companies to eliminate conflicts of interest, as well as display the connection of vaults with trading platforms.

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