EU regulators suggest the possibility of vetoing large-scale stablecoins | coindesk JAPAN | coindesk Japan

European Banking Authority (EBA) chairman says central banks will not issue stablecoins on a large scale if it threatens to reverse monetary policy, citing concerns that permissionless blockchain use could lead to fiscal unsoundness He said he should exercise his right of veto.

EBA Chairman José Manuel Campa will lay out detailed rules to implement the European Union’s (EU) Crypto Market Regulation (MiCA) in the coming months. This groundbreaking framework would require stablecoin issuers to obtain licenses and hold appropriate reserves.

“Central banks should have veto power over the widespread introduction of so-called stablecoins if they affect public policy objectives such as financial stability and monetary policy,” Kampa said on May 11. said at an event organized by the OMFIF (Official Monetary and Financial Institutions Forum). Kampa’s institution will also be responsible for direct oversight of major issuers under MiCA.

MiCA allows central banks to intervene in proposed issuance of new stablecoins called asset-referenced tokens. It is also mandated to stop issuing tokens if they become widely used in more than 1 million transactions per day. Different rules apply to stablecoins tied to a single fiat currency value, called e-money tokens.

Kampa said he sees a future where stablecoins become “more significant” as payment instruments, much like private payment systems complement central bank money.

Also responding to a question from Timothy Massad, former chairman of the U.S. Commodity Futures Trading Commission, Kampa said the decentralized investments of the U.S. Federal Reserve, Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency. They seemed to share concerns that stablecoins on unlicensed blockchains are insecure or even unsound.

Kampa said EU stablecoin issuers “must obtain permission. They must present their projects, and those projects must be evaluated, especially for the concerns raised by US regulators.” He added that more ambitious projects would come under more scrutiny.

“All issuers will be subject to robust licensing and oversight going forward,” Kampa said, including prudential governance, business conduct and redemption arrangements, with large issuers being prepared It said it would face an “enhanced stress test” for gold.

The MiCA is due to receive final approval from finance ministers next week, and its provisions will come into force around July 2024. Big names such as Circle and Unstoppable Finance have already announced their intention to issue stablecoins under MiCA.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
| Image: Jose Manuel Campa, Chairman of the European Banking Authority (EBA) (ECB/Flickr)
｜Original: EU Could Veto Large Stablecoins During MiCA Approval Process, Regulator Signals