The European Central Bank (ECB) has informed the EU Commission of its official assessment of the crypto regulation. The focus is on the decision-making power over Facebook’s Diem and comparable stablecoins.
Last September, the EU presented its own set of rules for dealing with crypto currencies. For the publishers of Stalbecoins, strict capital and liquidity requirements were stipulated. In an official legal opinion dated February 19, the European Central Bank (ECB) took a position on this. According to Reuters , the financial institution is demanding a right of veto on the approval of stablecoins. Accordingly, should:
assessing a potential threat to the conduct of monetary policy and the smooth functioning of payment systems fall within the exclusive competence of the ECB
According to the European Central Bank, stablecoins represent a potential risk for payment security in the euro zone. In addition to strict controls, the central bank therefore requires that the issuer be adequately protected against a possible bank run. You must have significant cash reserves to do this.
The central bank also wants to change something in the EU’s crypto regulations. The law is intended to stipulate that the opinion of the European authorities on stablecoin issues is binding for national decision-makers.
European Central Bank develops its own digital currency
The President of the European Central Bank, Christine Lagarde, is one of the warning voices when it comes to cryptocurrencies. Although she attested to cryptocurrencies as having a fundamental potential for innovation, she named stablecoins last November as a possible threat to the state’s currency sovereignty . Lagarde recently rejected the use of Bitcoin as a reserve currency .
Nevertheless, the European Central Bank is working on its own digital central bank currency. The digital euro will be on the starting line in the next four years. The planned CBDC is of course excluded from the EU’s crypto regulations.