The President of the European Central Bank calls for addressing the risks of non-EU stablecoins

ChainCatcher news, according to market news, European Central Bank (ECB) President Christine Lagarde has called on policymakers to fill the regulatory gaps for stablecoins, particularly those issued outside the EU's "sound" regulatory framework for crypto assets (MiCA).

In her prepared remarks for the ninth annual meeting of the European Systemic Risk Board on Wednesday, Lagarde stated that EU legislators should take appropriate measures regarding the issuance of stablecoins jointly by MiCA-regulated entities and non-EU entities; unless there is a "sound equivalent regulatory regime" in the place of issuance, including allowing EU investors to "always redeem their stablecoins at par value," and requiring issuers to have full reserve backing for the stablecoins issued, such issuers should not be allowed to operate in the EU.

Lagarde said, "Once a run occurs, investors will naturally tend to redeem in the jurisdiction with the strongest safeguards, which is likely to be the EU, as MiCA also prohibits charging redemption fees. However, the reserves held in the EU may not be sufficient to meet such concentrated redemption demands."