ESRB Proposes Ban on Multi-Issuer Stablecoins in EU
The European Systemic Risk Board (ESRB) has proposed a significant change in the cryptocurrency landscape. If approved, the non-binding recommendation could pressure authorities to restrict the operations of companies issuing multi-issuer stablecoins, such as Circle and Paxos.
The ESRB, a major European Union financial watchdog, has suggested banning stablecoins issued jointly within the EU and other jurisdictions. This proposal specifically targets stablecoins issued by multiple entities, a move that could significantly impact the industry.
The ESRB's recommendation, approved recently, aims to mitigate potential risks associated with these types of stablecoins. While not legally binding, it serves as a strong advisory to national authorities, who are currently negotiating its implementation. However, the specific government agencies involved in these negotiations remain undisclosed to the public.
The ESRB's recommendation, if adopted, could lead to significant changes in the stablecoin market. Companies like Circle and Paxos, which issue multi-issuer stablecoins, may face operational restrictions. The exact impact and implementation details will depend on the actions taken by national authorities in response to the ESRB's advisory.
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