If you look at what is available in the world of cryptocurrencies in stablecoins, it is not much. Apart from some stablecoins, which copy the value of, for example, gold or silver, there are almost only stablecoins on the US dollar. If you are reading this, you are probably more likely to use the euro, but it is difficult to get euro stablecoins. The European Commission now gives the impression that this will continue to be the case.
No to big euro stablecoins
That writes CoinDesk, which claims to have seen a report on the regulation of stablecoins. The study comes from the European Commission, but has not yet been published. It is a so-called ‘non-paper’, which does not represent the official position of the committee. With this it probably tries to promote discussion, which should result in better regulations. CoinDesk spoke to two individuals who confirmed the contents of the report.
Euro stablecoins, which do not come from the European Central Bank (ECB), will not be banned altogether, according to CoinDesk. Instead, the commission aims to limit stablecoin issuers to a maximum of 1 million transactions per day. The crypto newspaper implies that the market value should not exceed 200 million euros.
Of course, the report could not only aim to stimulate discussion. It could also be that the committee indicates that it does not want large stablecoins. The US seems to allow these stablecoins for the time being. Currently, Tether (USDT) is still the largest stablecoin with a market value of about $82 billion. That is much more than a theoretical limit of 200 million euros.
Eand a euro variant that is just as big would mean losing sight for the ECB. The ECB naturally issues the euro and wants to be in control of the euro itself. Even if a stablecoin has collateral with the same amount of euros, this could reduce the ECB’s influence.
Europe plans to soon ‘Markets in Crypto Assets Regulation’ (MiCA) Regulation to carry outn. The TerraUSD (UST) and Terra (LUNA) fiasco could potentially put pressure on this process. The fiasco highlights why some regulators want to regulate stablecoins. Discussions are also ongoing about regulating services using crypto as banking products.