Urgent Stability Measures
On October 2, 2025, the European Systemic Risk Board (ESRB) urged EU policymakers to implement urgent safeguards for stablecoins that are partly issued by entities outside the bloc. The move responds to concerns that failures in multi-issuer schemes could trigger runs on euro-denominated reserves and strain financial stability.
Multi-Issuer Vulnerabilities
The ESRB highlighted that multi-issuer stablecoin arrangements, where both EU-based and non-EU entities jointly issue tokens, create discrepancies in prudential standards. Under current Markets in Crypto-Assets (MiCA) regulations, only EU issuers are subject to stringent backing and transparency requirements, leaving non-EU issuers less regulated.
Reserve and Liquidity Risks
Concerns center on a potential scenario in which investors preferentially redeem stablecoins issued in the EU, exhausting local reserves while non-EU-issued tokens remain less backed. This mismatch could trigger liquidity squeezes and compel the European Central Bank (ECB) to intervene, raising broader monetary and fiscal policy challenges.
Regulatory Response
The ESRB recommended that MiCA be extended to cover third-country stablecoin issuers with operations or significant market shares in the EU. Uniform prudential and governance standards should apply to all issuers, regardless of jurisdiction, to ensure a level playing field and secure reserve management.
Systemic Safeguards
Proposed measures include mandatory reserve segmentation, periodic stress testing, and a harmonized sanction framework for non-compliant issuers. The ESRB also called for enhanced transparency in reserve composition and more robust redemption guarantees to prevent contagion risks across euro area financial markets.
Policy Implications
Implementing these recommendations may require amendments to existing EU regulations and closer coordination with international regulators. The ESRB emphasized that timely action is critical to maintaining trust in digital asset ecosystems and safeguarding financial stability.
Outlook
The ESRB’s statement underscores the EU’s commitment to establishing one of the world’s most rigorous crypto-asset regulatory regimes. The added focus on non-EU issuers aims to mitigate cross-border risks and fortify the integrity of stablecoin markets as demand for digital payment solutions grows.
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