EU emphasises need to diversify stablecoin reserves.

The forthcoming EU rules will place emphasis on diversifying the reserve backing of ‘stablecoins’, said José Manuel Campa, chair of the EBA.

On 20 April, the European Parliament approved the bill regulating the crypto-asset market (MiCA). The new rules will take effect from 2024.

MiCA requires stablecoin issuers to hold adequate reserves, and “the EBA will pay particular attention to the diversification of these funds,” Campa explained.

He stressed the importance of issuers eliminating conflicts of interest, and of showing the link between storage facilities and trading platforms.

“The contours of MiCA are already clear at this stage, and I would urge market participants to begin adjusting their trading activity to ensure robust risk management,” Campa said.

Earlier, as the vote approached, EU lawmakers discussed the advantages and drawbacks of MiCA. One of the bill’s authors said that its approval would place the jurisdiction “at the forefront of the digital-asset economy and restore the trust that was undermined by the collapse of FTX“.