European Commission: European cryptocurrency rules are sufficient to address stablecoin risks

According to Reuters, the European Commission stated on Friday that European cryptocurrency rules are adequate to address stablecoin risks, citing the need for major adjustments following calls from the European Central Bank for additional safeguards. While Europe has already adopted landmark cryptocurrency-specific regulations, Brussels lawmakers are under pressure from the European Central Bank to block the "multi-issuance" stablecoin model. The dispute centers on whether international stablecoin companies can treat tokens issued within the EU as fungible with those held outside the bloc. On Tuesday, six cryptocurrency industry associations, including Circle, wrote to the European Commission, calling for guidance recognizing the multi-issuance model and clarifying how it operates under the Markets in Crypto-Assets Directive (MiCA). A European Commission spokesperson stated that MiCA provides a robust and proportionate framework for addressing stablecoin risks and that clarification is being provided as quickly as possible. The European Systemic Risk Board (ESRB) has stated that the multi-issuance structure carries inherent risks, while the ECB is concerned about triggering a run on its reserves. Stablecoin issuers have stated that they have sufficient reserves to cover redemptions.