The European Central Bank (ECB) is demanding a veto right from European Union lawmakers over euro-backed stablecoin projects. A decision that would leave the field open to dollar-backed stablecoins, which already monopolize the market.
An uncertain future for euro-backed stablecoins
According to the Reuters news agency, the European Central Bank (ECB) is demanding a veto on the launch of euro-backed stablecoin projects . The ECB would like to get a bigger role in overseeing these stablecoins and even others that would be available in the eurozone, like Facebook’s Diem.
For the ECB, issuers of stablecoins must submit to the same liquidity requirements as banks and other financial institutions.
“Where an asset referencing system is equivalent to a payment system or device, the assessment of the potential threat to the conduct of monetary policy and the proper functioning of payment systems should be the sole responsibility of the ECB , ”The institution shared with Reuters.
Reuters reports that the rapid development of stablecoins around the world worries banking institutions. They fear that these assets backed by currencies like the euro or the dollar “weaken the control of payments, banking and, ultimately, the money supply. “
Thus, the ECB believes that it should have the final say in determining whether or not a stablecoin can be authorized.
In the event that lawmakers grant such power to the ECB, issuers of euro-backed stablecoins would face more regulatory barriers . This would even apply to stablecoins that would obtain the approval of a country’s regulators, such as the Diem with Switzerland in particular.
A Europe already behind
Today, the vast majority of cash committed to these stable cryptocurrencies is in dollar-backed stablecoins, notably USDT and USDT. Euro-backed stablecoins already exist, but these are struggling to find a place in the industry . If the European Central Bank gets the agreement of lawmakers, issuing these euro-backed stablecoins would become much more complex than to date.
As journalist Gregory Raymond reminds us , the cryptocurrency universe “currently operates almost exclusively in dollars. Slowing down this sector risks losing the opportunity to exercise Europe’s technological / monetary sovereignty. “
Europe would by itself widen the gap that already separates it from the United States when it comes to innovation in the cryptocurrency sector. Many American giants like Tesla, PayPal or Mastercard have already taken the turn of cryptocurrencies, while Europe and France are struggling to follow .
The ECB certainly wishes to keep the field open for the issuance of its digital euro, the launch of which is scheduled for the next 4 years …