EU Seeks Global Stablecoin Regulation Amid MiCAR Gaps

EU regulators are moving to extend MiCAR stablecoin regulation to non-EU issuers. At the ESRB conference, ECB President Christine Lagarde warned that legal gaps could expose investors to liquidity risks when stablecoins promise quick redemptions but back assets with risky investments. She called for robust equivalence regimes to prevent regulatory arbitrage and ensure safe cross-border asset transfers. Under MiCAR, stablecoin issuers must hold 1:1 reserves, obtain authorization, and ban redemption fees. However, multi-issuance schemes combining EU and non-EU entities currently escape full oversight. To close these gaps, Lagarde urged global cooperation. Meanwhile, the upcoming US GENIUS Act, effective by 2027, requires stablecoins such as USDC to maintain one-to-one backing. This may satisfy EU standards and foster convergence in stablecoin regulation. Traders should monitor these developments, as tighter rules could affect issuance, liquidity, and cross-border redemptions.