Italian Central Bank Demands EU-Wide Stablecoin Regulations Now

Rome sounds alarm on unregulated digital currencies—calls for Brussels to act before markets boil over.

The Warning Shot

Italy's central bank just fired the loudest warning yet across Europe's financial landscape. They're pushing EU regulators to clamp down on stablecoins—fast. No more waiting while private companies mint digital money without oversight.

Why This Matters

Stablecoins aren't just crypto toys anymore. They're becoming parallel payment systems that bypass traditional banking channels. The Italians see the risk—uncontrolled monetary expansion that could destabilize entire economies if left unchecked.

The Regulatory Race

Every day without clear rules gives crypto giants more leverage over global finance. Central bankers hate playing catch-up—especially to companies that might value growth over stability. It's the age-old tension between innovation and control, playing out with digital stakes.

Bottom Line: When traditional bankers start demanding regulations, you know they're either scared—or finally realizing they can't beat 'em so they'd better join 'em (with rules, of course). Typical finance—always locking the stable door after the digital horse has bolted.

EU Faces Cross-Border Stablecoin Dilemma

Chiara Scotti, deputy governor of the Bank of Italy, urged the EU to clarify how stablecoins issued in several countries should be regulated. She spoke on Thursday at a central banking conference in Rome.

Stablecoins are cryptocurrencies tied to fiat money or commodities and are treated in the EU as electronic money tokens (EMTs). The European Commission and the European Central Bank (ECB) disagree on how a “multi-country issuance model” fits existing rules.

A Reuters report in June said the Commission believes current EU regulations may allow cross-border interchangeability of these tokens. The ECB has warned that such a model could threaten financial stability if not backed by clear legislation.

Legal and Operational Risks

Scotti explained that EU stablecoin issuers might face redemption requests from holders outside the bloc. In a multi-country model, a non-EU subsidiary might need to MOVE assets to cover reserve shortages. That process could strain liquidity and create operational problems.

“This arrangement can boost global liquidity and scalability,” Scotti said. “But when the issuer is outside the EU, it creates serious legal, operational, and stability risks.”

She said new legislation or standard-setting WOULD be “timely and useful,” helping prevent systemic weaknesses.

Pressure for Unified Standards

The debate highlights the EU’s struggle to balance innovation with strong safeguards. Without clear rules, market participants face uncertainty that could slow adoption and hinder oversight.

The EU has advanced the Markets in Crypto-Assets (MiCA) regulation to govern digital assets. Yet how to treat stablecoins issued across borders remains unsettled. Policymakers and industry players are waiting for further guidance that will shape the next phase of EU crypto policy.