Officials fear that so-called “multi-jurisdiction” stablecoins could exploit loopholes by issuing tokens partly inside and partly outside the bloc. In the event of financial stress, users would likely rush to redeem coins in Europe — where strict reserve requirements and zero redemption fees apply — draining local protections faster than intended.
Speaking at the annual conference of the European Systemic Risk Board, ECB President Christine Lagarde said such vulnerabilities leave Europe exposed. She argued that only global coordination can prevent issuers from exploiting weaker regimes.
Her proposal would block non-EU issuers from entering the single market unless their home countries enforce equivalent rules. Stronger safeguards would also be required for cross-border transfers between EU and non-EU entities.
The warning comes as the United States, under President Donald Trump, has taken a looser stance. Earlier this year the Federal Reserve withdrew previous guidance that discouraged banks from touching crypto and stablecoins, a shift widely seen as an invitation for Wall Street to expand its role in digital assets.
Europe’s approach, by contrast, has centered on preventing runs and protecting consumers, positioning MiCA as the strictest stablecoin regime in the world. Whether those protections hold up without matching international standards, however, remains an open question.
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