Germany, France, Italy, Spain and the Netherlands have urged the European Commission to develop strict rules for stablecoins, “with the aim of protecting consumers and safeguarding state sovereignty in monetary policy.” Reuters reports.
In a joint statement, the finance ministers of the five countries expressed confidence that stablecoin issuance should not be admitted in the bloc of 27 member states, “until regulatory and supervisory issues are resolved”.
It is expected that the European Commission will present its regulatory proposals by the end of September.
“We all agree that our task is to ensure the stability of the financial markets,” said German Finance Minister Olaf Scholz.
Representatives of the five countries proposed:
- to require stablecoin issuers to maintain a strict 1:1 backing with fiat currency;
- stablecoin reserves should be denominated in euros or other currencies of EU member states;
- assets should be held in EU-approved institutions.
In addition, all stablecoin-related organisations must be registered in the EU.
“We expect very strict and clear rules from the Commission to prevent illicit use of cryptocurrencies to support terrorist activity and money laundering,” said Bruno Le Maire, France’s finance minister. “The European Central Bank is the only institution allowed to issue currency. And in this case, that must not be jeopardised or weakened by any projects, including Libra.”
As previously reported, the European Union is drafting new rules to regulate the cryptocurrency industry.
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