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EU member states called for tougher ...

EU member states urged to tighten regulation of stablecoins
CONTENT

  • The EU believes that functions for the circulation of stablecoins should be strictly regulated by regulators

  • The European Commission will make the final decision on the turnover of digital assets by the end of September

  • The EU views any attempts to influence the monetary policy of the member states of the union with hostility

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Thus, the EU wants to protect consumers and preserve state sovereignty in monetary policy

Leading European Union (EU) member states have called for stronger regulation of stablecoin circulation, writes Reuters, citing a joint statement by finance ministers.

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EU member states called for tougher ...

Germany, France, Italy, Spain and the Netherlands are reported to have urged the European Commission to increase pressure on stablecoin issuers, arguing tightening by “consumer protection” and “maintaining state sovereignty in monetary policy.”.

With EU approval

A joint statement from finance ministers emphasizes the need to maintain the bloc’s monetary sovereignty.

“We are in solidarity with the fact that our task is to maintain the stability of the financial market and ensure the main functions of the state,” said German Finance Minister Olaf Scholz.

As part of the tightening, the five countries intend to achieve full transparency from the issuers of stablecoins, including the mandatory ratio of each stablecoin to 1: 1 to fiat currency, the presence of a reserve denominated in euros or other currencies of the EU member states, as well as depositing in an institution approved by the EU.

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The European Commission is expected to submit its regulatory proposals at the end of September.

Infringement of sovereignty

EU concerns about the impact of stablecoins on local politics have been on display for a long time.

For example, some central banks and financial regulators have previously expressed concerns about the ability of Libra In June 2019, Facebook announced preparations for the release of the Libra digital currency. The social networking project immediately attracted attention … More influence monetary policy by blaming a product from FacebookIn June 2019, Facebook announced preparations for the release of the digital currency Libra. The social networking project immediately attracted attention … More in aiding money laundering.

EU member states called for tougher ...

Criticism of regulators led to the fact that the project lost most of its major partners at the stage of discussion.

Despite the hostile attitude from regulators, stablecoins are developing along a hyperbolic curve in the cryptocurrency market..

The market capitalization of Tether (USDT) alone has already surpassed $ 11 billion thanks to the hype around the decentralized finance market (DeFi) Decentralized finance (DeFi) is a financial services built on blockchain technology that offer users access to an open, efficient and … More).

Since the beginning of 2020, the capitalization of USDT has soared by 136%, and the capitalization of the entire DeFi market was able to exceed $ 15 billion..

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