ECB’s Lagarde Calls for Stricter Oversight of Non-EU Stablecoins

Christine Lagarde, President of the European Central Bank (ECB), has urged policymakers to tighten regulations on stablecoins operating outside the EU’s Markets in Crypto-Assets (MiCA) framework. Speaking at the European Systemic Risk Board conference, Lagarde emphasized the need for robust equivalence regimes to mitigate redemption risks for EU investors.

Lagarde warned that in the event of a market run, investors WOULD likely flock to jurisdictions with the strongest safeguards—such as the EU, where MiCA prohibits redemption fees. However, she cautioned that reserves held in the EU might not suffice to meet concentrated demand, highlighting potential vulnerabilities.

The debate over stablecoins—cryptocurrencies pegged to assets like the US dollar or euro—comes as global regulators grapple with balancing innovation and financial stability. The ECB’s stance could influence Europe’s approach to digital currencies amid evolving US regulatory developments.