In a reply to a Member of the European Parliament, European Central Bank President Christine Lagarde set out the ECB’s assessment of crypto-assets and monetary policy, arguing that the rapid growth of crypto-assets and stablecoins requires global standards and effective supervision. The ECB highlighted particular concern about stablecoins jointly issued by an EU firm and a third-country entity, warning that such “multi-issuance schemes” could dilute the safeguards that the EU’s Markets in Crypto-Assets Regulation (MiCAR) is designed to provide. For EU-authorised stablecoin issuers, MiCAR’s regime for e-money tokens and asset-referenced tokens includes reserve requirements in high-quality liquid assets, minimum own funds, and crisis management tools such as recovery and redemption plans. Against a backdrop of limited and fragmented global implementation of the Financial Stability Board’s 2023 recommendations, the ECB linked the EU’s restriction of stablecoin issuance to EU-authorised firms to the risk that third-country regimes may lack key prudential and crisis-management elements. In a multi-issuance structure, the EU issuer could remain liable for global reimbursement while not holding all backing assets in the EU, raising risks around the location and transferability of reserves in a de-pegging or run scenario and potentially enabling fee-driven redemption arbitrage where third-country regimes allow redemption fees but MiCAR does not. The letter also distinguished MiCAR’s issuer-focused crisis management from lender of last resort frameworks, noting that euro area central bank liquidity support is available to credit institutions via monetary policy operations and, exceptionally, emergency liquidity assistance led by national central banks under the Eurosystem’s ELA Agreement. On household exposure, the ECB referenced its November 2024 Consumer Expectations Survey, which found 9.7% of respondents (or someone in their household) owned crypto-assets on average across selected euro area countries, with country figures ranging from 6% to 21%; among holders, 54% reported holdings below EUR 1,000 and 91% below EUR 20,000, with aggregate holdings estimated at about 0.23% of households’ financial assets. The ECB noted that usage is mainly for investment and speculation and called for more data, stressing that effective compliance with MiCAR reporting obligations is important for the ECB’s monitoring role. On inflation and policy, the letter summarised ECB research and its 2025 monetary policy strategy assessment as finding external supply shocks were important drivers of the post-pandemic inflation surge, alongside later demand and domestic factors such as wages, and stated that policy rates remain the primary tool for achieving price stability.
European Central Bank 2025-09-26
European Central Bank warns EU third-country stablecoin multi-issuance could undermine MiCAR protections
ECB President Christine Lagarde stressed the need for global standards and supervision of crypto-assets and stablecoins, citing concerns about multi-issuance schemes undermining EU safeguards under MiCAR. The ECB linked stablecoin issuance restrictions to risks from third-country regimes lacking prudential elements. Additionally, 9.7% of euro area households owned crypto-assets, mainly for investment, highlighting the importance of MiCAR reporting for effective monitoring.