Stablecoin Reserves Need To Be Diverse, EU Bank
The next European Union laws for stablecoins will focus on ensuring issuers have varied reserves, handle conflicts of interest, and do not transmit risks to other parties, according to José Manuel Campa, chairman of the European Banking Authority, in an article for think tank Eurofi.
The EU’s Markets in Crypto Assets rules, known as MiCA, are expected to go into effect next year, but crypto market participants should start adapting their operations immediately, according to Campa, whose agency will play a significant role in implementing MiCA by developing further specifics of the laws. Last week, the European Union approved MiCA.
MiCA requires issuers of stablecoins to have enough reserves to manage turbulence – and “the EBA will be paying special attention to diversification of the deposit component of the reserve,” Campa wrote.
(With inputs from Shikha Singh)
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