ECB Backs Ban On Multi-jurisdiction Stablecoins, Hitting US Firms

The European Central Bank has voiced strong support for banning stablecoins issued across multiple regions, targeting companies like Circle and Paxos that operate internationally.

The idea originated from the European Systemic Risk Board, which recently recommended restricting “multi-issuance” stablecoins, citing systemic risks.

Though not yet law, the proposal pressures regulators to either follow the ban or prove how they can safeguard financial stability without it.

ECB President Christine Lagarde has repeatedly flagged risks tied to non-EU stablecoin issuers, including operational problems, liquidity shortages, and legal uncertainties.

A recent ECB report also noted that reserves held by such firms are often invested in U.S. assets, potentially undermining Europe’s investment goals.

While the Bank of Italy has urged the European Commission to clarify legal rules, no binding decision has been made.

For now, the debate highlights Europe’s cautious stance on stablecoins as it balances innovation with monetary sovereignty.

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