In a speech to the European Parliament’s Committee on Economic and Monetary Affairs, Francesco Mazzaferro, Head of the European Systemic Risk Board (ESRB) Secretariat, highlighted the ESRB’s recent recommendation on third-country multi-issuer stablecoin schemes and urged the European Commission to confirm by the end of 2025 that such arrangements are not permissible under the Markets in Crypto-Assets Regulation (MiCAR). He argued that, in a severe stress event, fungible EU and third-country stablecoins could trigger large redemption flows into the EU to benefit from MiCAR’s redemption terms, overwhelming EU issuers’ reserves and amplifying run dynamics, potentially compounded by limits on cross-border reserve transfers. The speech stressed that the recommendation is not aimed at banning stablecoins denominated in foreign currency in the EU, but at ensuring that stablecoins issued in the EU remain separate from, and not fungible with, stablecoins issued outside the EU. If the Commission does not provide the requested clarification and considers third-country fungibility warranted, the ESRB’s “plan B” calls for the EU legislator and relevant EU and national authorities to establish safeguards, with some measures to be implemented by 2026 and others by 2027. Mazzaferro also discussed tokenisation risks highlighted by the International Organization of Securities Commissions and the Financial Stability Board, including the potential for DLT-enabled “atomic settlement” to concentrate multiple market functions in a single intermediary and to shift risk from settlement frictions to pervasive liquidity demands driven by continuous prefunding. He pointed to recent market developments as warning signs, including some global stablecoin issuers reportedly avoiding MiCAR authorisation due to audit requirements and relying instead on attestations, alongside S&P Global’s recent rating reduction for Tether linked to reserve disclosure issues. Operational resilience concerns were illustrated by the October 2025 crypto market crash, when the synthetic stablecoin USDe fell to USD 0.65 on Binance due to a technical failure while trading near parity elsewhere, highlighting how platform-level fragmentation can undermine the “singleness of money” principle.
European Systemic Risk Board 2025-12-03
European Systemic Risk Board calls on European Commission to clarify MiCAR does not permit third-country multi-issuer stablecoin schemes
Francesco Mazzaferro, Head of the European Systemic Risk Board Secretariat, urged the European Commission to confirm by the end of 2025 that third-country multi-issuer stablecoin schemes are not permissible under the Markets in Crypto-Assets Regulation. He warned that fungible EU and third-country stablecoins could trigger large redemption flows into the EU, overwhelming issuers' reserves and amplifying run dynamics. Mazzaferro also highlighted tokenisation risks and operational resilience concerns, citing recent market developments and the October 2025 crypto market crash as warnings.