Europe will tighten regulation for issuers of stablecoins

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The European Banking Authority (EBA) has tightened capital requirements for companies issuing "significant" tokens

Issuers of stablecoins whose reserves include derivatives or covered bonds will receive additional regulatory regulation, CoinDesk reports with reference to the new rules of the European Banking Authority (EBA).

The document introduces stricter capital requirements for such companies in case the tokens they issue are recognized as "significant". The functions of supervision over such companies will be partially or fully performed by the EBA, the newspaper writes.

"One ART issuer has financial problems (a token associated with an asset. — "RBC-Crypto") or EMT (electronic money token. — "RBC-Crypto") can significantly increase the risks of difficulties for other issuers of crypto assets and other financial institutions, given the network of their contractual obligations," the text of the document says.

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The EBA has also defined criteria for classifying stablecoins as "significant". In particular, this is the market share in cross-border payments and the number of users.

"It will affect everyone in general." What is the threat of the law on cryptocurrencies adopted in the EU

In May, the Council of Europe adopted the regulation of digital assets Markets in Crypto-Assets (MiCA). 27 EU member states unanimously supported the bill. The document introduces institutional regulation of the issue of cryptocurrencies and establishes a uniform legal regime for crypto companies on the territory of the European Union.

According to these rules, any stablecoins that are closely linked to the financial system are subject to additional capital requirements and centralized supervision by the European Union.

In February, the Bank for International Settlements (BIS) announced that it would develop a system for monitoring stablecoins. A corresponding project called Project Pyxtrial will be launched by the London division of BIS.

The European Union also called for limiting the amount of leverage for cryptocurrency trading. Unregulated lending and margin trading on crypto exchanges may pose a threat to the traditional financial system, according to the European Council on Systemic Risks. In addition, the European Union called for stricter rules for advertising cryptocurrencies in social networks.

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