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European Central Bank: US Cryptocurrency Policy Could Undermine Stability of European Financial System

2 hours ago

On April 22nd, as per Cointelegraph, the European Central Bank (ECB) has voiced concerns regarding the U.S.'s supportive and aggressive stances towards the cryptocurrency industry. It has issued a warning that the rapid growth of USD stablecoins could potentially destabilize the European financial system. The ECB is advocating for amendments to the recently implemented Markets in Crypto-Assets Regulation (MiCA). The bank is apprehensive that the U.S. reform efforts backed by Trump could result in a flood of USD stablecoins entering the European market, leading to European capital outflows towards U.S. assets. This, in turn, could undermine the EU's financial sovereignty and expose banks to liquidity risks. In response to this, some officials contend that these warnings are overstated. Two diplomats and one EU official have stated that despite the U.S.'s intentions to introduce the Stablecoin Transparency and Accountability Act (STABLE) and the U.S. Stablecoin National Innovation and Stabilization Act (GENIUS), the existing MiCA framework is adequate to manage stablecoin risks.
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