ECB wants final say on stablecoin issuance under new EU regulation
The European Central Bank (ECB) wants to have the final say on the issuance of stablecoins under EU regulation proposed in September.
The ECB published its opinion on amendments for crypto-asset regulation last month to the European Council.
It reads: “The proposed regulation provides that a competent authority may refuse authorisation to an issuer of asset-referenced tokens […] where the issuer’s business model may pose a serious threat to financial stability, monetary policy transmission or monetary sovereignty.”
Based on this observation, the ECB says it “should fall within the exclusive competence of the ECB” to assess any potential threats.
The central bank also makes a clear distinction between crypto-assets or financial instruments under MiFID II. And those which would fall under the scope of this new regulation.
“The ECB understands that the terms ‘asset-referenced tokens’ and ‘e-money tokens’ are defined in the proposed regulation, in whole or in part, as money substitutes,” it says.
This new regulation won’t apply in the UK following Brexit. But the ECB says in Member States whose currency is not the euro, central banks should be able to act like the ECB.
Still weighing up digital euro
The ECB is still weighing up whether it wants to issue a digital euro. Currently, the central bank says it’s in the “preparation phase”. This means it’s yet to develop a concept or test it.
“We have not yet decided whether to issue a digital euro,” the ECB says on its website. “We will decide whether to launch a digital euro project towards the middle of 2021.”
Despite such a far-out deadline, the central bank says it will “be prepared for the possible issuance of a digital euro at some point in the future”.
In October 2020, the ECB published a report introducing the idea of a digital euro. It then closed consultation on the topic on 12 January, having received 8,221 responses.
On 10 February, ECB executive board member Fabio Panetta discussed some of the design considerations for a digital euro during an online seminar.
One was a digital euro storage threshold of €3,000 for each European consumer. After which negative interest rates would incur and encourage people to cash out.
“Only when all issues have been addressed will we make a decision about whether or not to issue a digital euro,” he said.
In the spring, the ECB will publish detailed analysis of the digital euro public consultation it closed back in January.