Seeking diversity in stablecoin reserves ── Chairman of the European Banking Authority suggests | coindesk JAPAN | Coindesk Japan

The chairman of the European Banking Authority (EBA) has said that upcoming European Union (EU) rules governing stablecoins will allow issuers to hold diverse reserves to manage conflicts of interest and other said it will focus on avoiding spreading risk to other players.

The European Union’s (EU) Crypto Market Regulation Act (MiCA) is set to come into force in 2024, but crypto market players should start adjusting their operations now, according to the EBA’s Jose Manuel. Chair José Manuel Campa said. The agency will play an important role in its implementation through the drafting of relevant legislation.

MiCA requires stablecoin issuers to have sufficient reserves to deal with turbulence, and “the EBA will pay particular attention to reserve diversity,” said Kampa Robbie. Writing in a contribution to the organization’s Eurofi.

Kampa stresses the importance of stablecoin issuers mitigating conflicts of interest and mapping connections with custodians and trading platforms to avoid spreading risk within the crypto ecosystem. bottom.

While the law licensing wallet providers and exchanges has not yet been formally enacted, “MiCA’s profile is well known and market participants will begin to adjust their operations to ensure sound risk management.” I recommend that,” Kampa said.

Last year, the dramatic demise of algorithmic stablecoin TerraUSD (UST) prompted regulators to turn their attention to how to manage crypto assets tied to fiat currencies and other assets such as gold. there is

The November collapse of exchange FTX and the revelation of its murky relationship with trading arm Alameda Research also drew attention to the risks posed by large and often complex crypto conglomerates.

“There is no transparency in the corporate structures, business models and exposures of major crypto market participants,” wrote Martin Moloney for Eurofi. Molony is the executive director of the International Organization of Securities Commissions (IOSCO), which will soon release its consultations on the crypto standard, which will be finalized later this year.

The risks are “exacerbated by the apparent concentration of the market on the three big so-called trading platforms,” ​​Moloney added.

｜Translation: coindesk JAPAN
｜Editing: Toshihiko Inoue
｜Image: Shutterstock
｜Original: Stablecoin Reserves Need to Be Diverse, EU Bank Agency Chief Says