European Banking Authority May Veto Large Stablecoins During MiCA Approval Process
The chair of the European Banking Authority (EBA), José Manuel Campa, has argued that central banks should veto stablecoins if they have fears the private, permissionless blockchains and crypto projects could threaten monetary policy.
"Central banks should have the power to veto the widespread introduction of so-called stablecoins" if they affect financial stability, monetary policy, and other policy goals.
Over the next few months, Campa will be working on the precise and detailed rules to implement the much-anticipated European Union’s Markets in Crypto Assets regulation (MiCA) framework.
MiCA is likely to get the final vote from finance ministers next week - and after passing the vote in the European Parliament, the law will enter into force, with some of the most important provisions expected to take effect 12 to 18 months later.
Among many other things, MiCA will require all stablecoin issuers operating within the EU to have a license and hold sufficient reserves.
Campa, however, opined that stablecoins could become "even more relevant" as a means of payment in the future, complementing other forms of payment, but added that these coins would need to have "sensible guardrails."
These would include complying with laws and regulations, such as anti-money laundering laws.
EU stablecoin issuers must "ask for permission" and present their projects, which will then be assessed, "particularly for the concerns that have been put forward by the US regulators," he said.
"All issuers will be subject to a robust authorization and also supervisory framework going forward," Campa added.
Larger projects would see more scrutiny, and the largest issuers would see "enhanced stress testing" of reserves.
The authority will look into
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