The European Systemic Risk Board (ESRB) published a report on systemic risks in the crypto-asset ecosystem and adopted a Recommendation targeting stablecoins that are jointly issued by EU and non-EU entities. The report highlights the growing interlinkages between crypto-assets and traditional finance, including through stablecoin reserve assets held at commercial banks. The report covers stablecoins, crypto-asset investment products and multi-function groups, calling for close monitoring as integration into mainstream finance deepens and investor access broadens. It stresses the need for high-quality, liquid eligible reserve assets in the EU and flags supervisory challenges from multi-function groups with opaque structures and cross-border regulatory arbitrage, prompting calls for formal supervisory cooperation mechanisms and group-level reporting requirements. On stablecoins jointly issued across the EU and third countries, the ESRB points to run dynamics and potential constraints on cross-border reserve transfers, and notes that the Markets in Crypto-Assets Regulation (MiCAR) does not explicitly envisage this issuance model. Under its two-pronged strategy, the ESRB recommends that the European Commission clarify by end-2025 that third-country multi-issuer stablecoin schemes are not permitted under the current MiCAR framework. If such clarification is not provided, the ESRB urges relevant authorities to implement safeguards including enhanced supervision, closer international cooperation and legal reforms, with most measures to be in place by end-2026 and the remainder by end-2027; the ESRB will monitor implementation and addressees must report actions taken and justify any inaction.
European Systemic Risk Board 2025-10-20
European Systemic Risk Board issues recommendation on third-country multi-issuer stablecoin schemes alongside crypto systemic risk report
The European Systemic Risk Board published a report on systemic risks in the crypto-asset ecosystem and adopted a Recommendation targeting stablecoins jointly issued by EU and non-EU entities, highlighting growing links with traditional finance and vulnerabilities from reserve assets held at commercial banks. It calls for closer monitoring of stablecoins, crypto-asset investment products and multi-function groups, improved supervisory cooperation and group-level reporting, and stresses the need for high-quality, liquid reserve assets. The ESRB urges the European Commission to clarify that third-country multi-issuer stablecoin schemes are not permitted under the current Markets in Crypto-Assets Regulation framework.