ECB Warns US Crypto Reforms Threaten European Financial Stability

The European Central Bank (ECB) has issued a warning regarding potential financial instability triggered by US regulations on the crypto industry. The ECB cites concerns about the expansion of dollar-backed stablecoins, arguing that an increase in these assets could destabilize Europe’s financial system. They advocate for a revised regulatory framework to address the risks posed by such developments. Specifically, they urge changes to the Markets in Crypto-Assets Regulation (MiCA) to ensure that European markets are not overwhelmed with dollar-denominated stablecoins due to US policies.